Correlation Between Aberdeen China and Aberdeen Multi
Can any of the company-specific risk be diversified away by investing in both Aberdeen China and Aberdeen Multi 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 Multi 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 Multi Cap Equity, you can compare the effects of market volatilities on Aberdeen China and Aberdeen Multi 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 Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen China and Aberdeen Multi.
Diversification Opportunities for Aberdeen China and Aberdeen Multi
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen China Oppty and Aberdeen Multi Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Multi Cap 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 Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Multi Cap has no effect on the direction of Aberdeen China i.e., Aberdeen China and Aberdeen Multi go up and down completely randomly.
Pair Corralation between Aberdeen China and Aberdeen Multi
Assuming the 90 days horizon Aberdeen China Oppty is expected to generate 1.17 times more return on investment than Aberdeen Multi. However, Aberdeen China is 1.17 times more volatile than Aberdeen Multi Cap Equity. It trades about 0.29 of its potential returns per unit of risk. Aberdeen Multi Cap Equity is currently generating about 0.14 per unit of risk. If you would invest 2,237 in Aberdeen China Oppty on May 30, 2025 and sell it today you would earn a total of 310.00 from holding Aberdeen China Oppty or generate 13.86% 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 Multi Cap Equity
Performance |
| Timeline |
| Aberdeen China Oppty |
| Aberdeen Multi Cap |
Aberdeen China and Aberdeen Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen China and Aberdeen Multi
The main advantage of trading using opposite Aberdeen China and Aberdeen Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen China position performs unexpectedly, Aberdeen Multi 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 Multi will offset losses from the drop in Aberdeen Multi'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 Multi vs. Aberdeen Emerging Markets | Aberdeen Multi vs. Aberdeen Emerging Markets | Aberdeen Multi vs. Aberdeen Emerging Markets | Aberdeen Multi vs. Aberdeen Gbl Eq |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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