Correlation Between Aberdeen Emerging and Aberdeen Ultra
Can any of the company-specific risk be diversified away by investing in both Aberdeen Emerging and Aberdeen Ultra at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aberdeen Emerging and Aberdeen Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Emerging Markts and Aberdeen Ultra Short, you can compare the effects of market volatilities on Aberdeen Emerging and Aberdeen Ultra and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aberdeen Emerging with a short position of Aberdeen Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Emerging and Aberdeen Ultra.
Diversification Opportunities for Aberdeen Emerging and Aberdeen Ultra
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Emerging Markts and Aberdeen Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Ultra Short and Aberdeen Emerging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aberdeen Emerging Markts are associated (or correlated) with Aberdeen Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Ultra Short has no effect on the direction of Aberdeen Emerging i.e., Aberdeen Emerging and Aberdeen Ultra go up and down completely randomly.
Pair Corralation between Aberdeen Emerging and Aberdeen Ultra
Assuming the 90 days horizon Aberdeen Emerging Markts is expected to generate 18.07 times more return on investment than Aberdeen Ultra. However, Aberdeen Emerging is 18.07 times more volatile than Aberdeen Ultra Short. It trades about 0.19 of its potential returns per unit of risk. Aberdeen Ultra Short is currently generating about 0.19 per unit of risk. If you would invest 1,479 in Aberdeen Emerging Markts on June 8, 2025 and sell it today you would earn a total of 132.00 from holding Aberdeen Emerging Markts or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Emerging Markts vs. Aberdeen Ultra Short
Performance |
| Timeline |
| Aberdeen Emerging Markts |
| Aberdeen Ultra Short |
Aberdeen Emerging and Aberdeen Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Emerging and Aberdeen Ultra
The main advantage of trading using opposite Aberdeen Emerging and Aberdeen Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Emerging position performs unexpectedly, Aberdeen Ultra can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aberdeen Ultra will offset losses from the drop in Aberdeen Ultra's long position.| Aberdeen Emerging vs. Us Government Securities | Aberdeen Emerging vs. Old Westbury Municipal | Aberdeen Emerging vs. Alpine Ultra Short | Aberdeen Emerging vs. California Municipal Portfolio |
| Aberdeen Ultra vs. Alpine Global Infrastructure | Aberdeen Ultra vs. Alpine Realty Income | Aberdeen Ultra vs. Aberdeen Emerging Markets | Aberdeen Ultra vs. Aberdeen Emerging Markets |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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