Correlation Between Aberdeen Australia and Select Fund
Can any of the company-specific risk be diversified away by investing in both Aberdeen Australia and Select Fund 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 Australia and Select Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Australia Ef and Select Fund I, you can compare the effects of market volatilities on Aberdeen Australia and Select Fund 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 Australia with a short position of Select Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Australia and Select Fund.
Diversification Opportunities for Aberdeen Australia and Select Fund
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aberdeen and Select is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Australia Ef and Select Fund I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Fund I and Aberdeen Australia 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 Australia Ef are associated (or correlated) with Select Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Fund I has no effect on the direction of Aberdeen Australia i.e., Aberdeen Australia and Select Fund go up and down completely randomly.
Pair Corralation between Aberdeen Australia and Select Fund
Considering the 90-day investment horizon Aberdeen Australia is expected to generate 1.18 times less return on investment than Select Fund. But when comparing it to its historical volatility, Aberdeen Australia Ef is 1.13 times less risky than Select Fund. It trades about 0.04 of its potential returns per unit of risk. Select Fund I is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12,001 in Select Fund I on April 18, 2025 and sell it today you would earn a total of 1,306 from holding Select Fund I or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Australia Ef vs. Select Fund I
Performance |
| Timeline |
| Aberdeen Australia |
| Select Fund I |
Aberdeen Australia and Select Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Australia and Select Fund
The main advantage of trading using opposite Aberdeen Australia and Select Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Australia position performs unexpectedly, Select Fund 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 Select Fund will offset losses from the drop in Select Fund's long position.| Aberdeen Australia vs. Aberdeen Japan Equity | Aberdeen Australia vs. Aberdeen Global IF | Aberdeen Australia vs. European Equity Closed | Aberdeen Australia vs. New Germany Closed |
| Select Fund vs. Select Fund A | Select Fund vs. Mid Cap Value | Select Fund vs. Equity Growth Fund | Select Fund vs. Income Growth Fund |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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