Correlation Between Aberdeen China and Aberdeen Ultra
Can any of the company-specific risk be diversified away by investing in both Aberdeen China 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 China 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 China Oppty and Aberdeen Ultra Short, you can compare the effects of market volatilities on Aberdeen China 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 China with a short position of Aberdeen Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen China and Aberdeen Ultra.
Diversification Opportunities for Aberdeen China and Aberdeen Ultra
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen China Oppty 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 China 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 China Oppty 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 China i.e., Aberdeen China and Aberdeen Ultra go up and down completely randomly.
Pair Corralation between Aberdeen China and Aberdeen Ultra
Assuming the 90 days horizon Aberdeen China Oppty is expected to generate 18.96 times more return on investment than Aberdeen Ultra. However, Aberdeen China is 18.96 times more volatile than Aberdeen Ultra Short. It trades about 0.33 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 2,255 in Aberdeen China Oppty on June 3, 2025 and sell it today you would earn a total of 386.00 from holding Aberdeen China Oppty or generate 17.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen China Oppty vs. Aberdeen Ultra Short
Performance |
| Timeline |
| Aberdeen China Oppty |
| Aberdeen Ultra Short |
Aberdeen China and Aberdeen Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen China and Aberdeen Ultra
The main advantage of trading using opposite Aberdeen China and Aberdeen Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen China 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 China vs. Aberdeen Emerging Markets | Aberdeen China vs. Aberdeen Emerging Markets | Aberdeen China vs. Aberdeen Emerging Markets | Aberdeen China vs. Aberdeen Gbl Eq |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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