Correlation Between Aberdeen Small and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Aberdeen Small and Pear Tree 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 Small and Pear Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Small Cap and Pear Tree Quality, you can compare the effects of market volatilities on Aberdeen Small and Pear Tree 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 Small with a short position of Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Small and Pear Tree.
Diversification Opportunities for Aberdeen Small and Pear Tree
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aberdeen and Pear is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Small Cap and Pear Tree Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Quality and Aberdeen Small 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 Small Cap are associated (or correlated) with Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Quality has no effect on the direction of Aberdeen Small i.e., Aberdeen Small and Pear Tree go up and down completely randomly.
Pair Corralation between Aberdeen Small and Pear Tree
Assuming the 90 days horizon Aberdeen Small is expected to generate 3.58 times less return on investment than Pear Tree. In addition to that, Aberdeen Small is 1.48 times more volatile than Pear Tree Quality. It trades about 0.03 of its total potential returns per unit of risk. Pear Tree Quality is currently generating about 0.13 per unit of volatility. If you would invest 2,429 in Pear Tree Quality on September 5, 2025 and sell it today you would earn a total of 157.00 from holding Pear Tree Quality or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Small Cap vs. Pear Tree Quality
Performance |
| Timeline |
| Aberdeen Small Cap |
| Pear Tree Quality |
Aberdeen Small and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Small and Pear Tree
The main advantage of trading using opposite Aberdeen Small and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Small position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Aberdeen Small vs. Slow Capital Growth | Aberdeen Small vs. Eagle Growth Income | Aberdeen Small vs. Stringer Growth Fund | Aberdeen Small vs. Templeton Growth Fund |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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