Correlation Between Aberdeen Diversified and Angling Direct

Can any of the company-specific risk be diversified away by investing in both Aberdeen Diversified and Angling Direct 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 Diversified and Angling Direct into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aberdeen Diversified Income and Angling Direct PLC, you can compare the effects of market volatilities on Aberdeen Diversified and Angling Direct 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 Diversified with a short position of Angling Direct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Diversified and Angling Direct.

Diversification Opportunities for Aberdeen Diversified and Angling Direct

0.43

Correlation Coefficient

Aberdeen Diversified  Angling Direct

Very weak diversification

The 3 months correlation between Aberdeen and Angling is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Diversified Income and Angling Direct PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angling Direct PLC and Aberdeen Diversified 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 Diversified Income are associated (or correlated) with Angling Direct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angling Direct PLC has no effect on the direction of Aberdeen Diversified i.e., Aberdeen Diversified and Angling Direct go up and down completely randomly.

Pair Corralation between Aberdeen Diversified and Angling Direct

Assuming the 90 days trading horizon Aberdeen Diversified is expected to generate 2.54 times less return on investment than Angling Direct. But when comparing it to its historical volatility, Aberdeen Diversified Income is 2.32 times less risky than Angling Direct. It trades about 0.19 of its potential returns per unit of risk. Angling Direct PLC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,500  in Angling Direct PLC on April 24, 2025 and sell it today you would earn a total of  1,050  from holding Angling Direct PLC or generate 30.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aberdeen Diversified Income  vs.  Angling Direct PLC

Aberdeen Diversified

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Diversified Income are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Aberdeen Diversified may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Angling Direct PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Angling Direct PLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Angling Direct exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aberdeen Diversified and Angling Direct

The main advantage of trading using opposite Aberdeen Diversified and Angling Direct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Diversified position performs unexpectedly, Angling Direct 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 Angling Direct will offset losses from the drop in Angling Direct's long position.

The idea behind Aberdeen Diversified Income and Angling Direct PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.