Correlation Between Sarama Resource and Aberdeen International

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

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

Diversification Opportunities for Sarama Resource and Aberdeen International

-0.03

Correlation Coefficient

Sarama Resource  Aberdeen International

Good diversification

The 3 months correlation between Sarama and Aberdeen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sarama Resource and Aberdeen International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen International and Sarama Resource 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 Sarama Resource are associated (or correlated) with Aberdeen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen International has no effect on the direction of Sarama Resource i.e., Sarama Resource and Aberdeen International go up and down completely randomly.

Pair Corralation between Sarama Resource and Aberdeen International

Assuming the 90 days horizon Sarama Resource is expected to generate 1.39 times less return on investment than Aberdeen International. In addition to that, Sarama Resource is 1.04 times more volatile than Aberdeen International. It trades about 0.05 of its total potential returns per unit of risk. Aberdeen International is currently generating about 0.07 per unit of volatility. If you would invest  3.00  in Aberdeen International on April 16, 2025 and sell it today you would earn a total of  0.50  from holding Aberdeen International or generate 16.67% return on investment over 90 days.

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

Sarama Resource  vs.  Aberdeen International

Sarama Resource

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sarama Resource are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sarama Resource showed solid returns over the last few months and may actually be approaching a breakup point.

Aberdeen International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental drivers, Aberdeen International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sarama Resource and Aberdeen International

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

The idea behind Sarama Resource and Aberdeen International 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.