Correlation Between Abrdn Property and Travel Leisure

Can any of the company-specific risk be diversified away by investing in both Abrdn Property and Travel Leisure 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 Abrdn Property and Travel Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between abrdn Property Income and Travel Leisure Co, you can compare the effects of market volatilities on Abrdn Property and Travel Leisure 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 Abrdn Property with a short position of Travel Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Property and Travel Leisure.

Diversification Opportunities for Abrdn Property and Travel Leisure

-0.39

Correlation Coefficient

Abrdn Property  Travel Leisure

Very good diversification

The 3 months correlation between Abrdn and Travel is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Property Income and Travel Leisure Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travel Leisure and Abrdn Property 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 abrdn Property Income are associated (or correlated) with Travel Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travel Leisure has no effect on the direction of Abrdn Property i.e., Abrdn Property and Travel Leisure go up and down completely randomly.

Pair Corralation between Abrdn Property and Travel Leisure

Assuming the 90 days trading horizon abrdn Property Income is expected to under-perform the Travel Leisure. In addition to that, Abrdn Property is 21.28 times more volatile than Travel Leisure Co. It trades about -0.07 of its total potential returns per unit of risk. Travel Leisure Co is currently generating about 0.13 per unit of volatility. If you would invest  5,759  in Travel Leisure Co on April 20, 2025 and sell it today you would earn a total of  56.00  from holding Travel Leisure Co or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

abrdn Property Income  vs.  Travel Leisure Co

abrdn Property Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days abrdn Property Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Travel Leisure

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Travel Leisure Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Travel Leisure is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Abrdn Property and Travel Leisure

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

The idea behind abrdn Property Income and Travel Leisure Co 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.