Correlation Between Aberdeen Global and Moodys

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Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and Moodys 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 Global and Moodys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Global Premier and Moodys, you can compare the effects of market volatilities on Aberdeen Global and Moodys 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 Global with a short position of Moodys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Moodys.

Diversification Opportunities for Aberdeen Global and Moodys

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between Aberdeen and Moodys is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Premier and Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moodys and Aberdeen Global 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 Global Premier are associated (or correlated) with Moodys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moodys has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Moodys go up and down completely randomly.

Pair Corralation between Aberdeen Global and Moodys

Considering the 90-day investment horizon Aberdeen Global Premier is expected to generate 0.81 times more return on investment than Moodys. However, Aberdeen Global Premier is 1.24 times less risky than Moodys. It trades about 0.42 of its potential returns per unit of risk. Moodys is currently generating about 0.17 per unit of risk. If you would invest  363.00  in Aberdeen Global Premier on December 29, 2023 and sell it today you would earn a total of  25.00  from holding Aberdeen Global Premier or generate 6.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aberdeen Global Premier  vs.  Moodys

 Performance 
       Timeline  
Aberdeen Global Premier 

Risk-Adjusted Performance

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Low
 
High
Weak
Over the last 90 days Aberdeen Global Premier has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
Moodys 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Moodys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Moodys is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Aberdeen Global and Moodys Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aberdeen Global and Moodys

The main advantage of trading using opposite Aberdeen Global and Moodys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Global position performs unexpectedly, Moodys 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 Moodys will offset losses from the drop in Moodys' long position.
The idea behind Aberdeen Global Premier and Moodys 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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