Correlation Between Abrdn Physical and Abrdn Physical

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

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

Diversification Opportunities for Abrdn Physical and Abrdn Physical

-0.02

Correlation Coefficient

Abrdn Physical  Abrdn Physical

Good diversification

The 3 months correlation between Abrdn and Abrdn is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Physical Silver and abrdn Physical Palladium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Physical Palladium and Abrdn Physical 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 Physical Silver are associated (or correlated) with Abrdn Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Physical Palladium has no effect on the direction of Abrdn Physical i.e., Abrdn Physical and Abrdn Physical go up and down completely randomly.

Pair Corralation between Abrdn Physical and Abrdn Physical

Given the investment horizon of 90 days abrdn Physical Silver is expected to generate 0.9 times more return on investment than Abrdn Physical. However, abrdn Physical Silver is 1.11 times less risky than Abrdn Physical. It trades about 0.19 of its potential returns per unit of risk. abrdn Physical Palladium is currently generating about -0.02 per unit of risk. If you would invest  2,287  in abrdn Physical Silver on March 4, 2024 and sell it today you would earn a total of  619.00  from holding abrdn Physical Silver or generate 27.07% return on investment over 90 days.

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

abrdn Physical Silver  vs.  abrdn Physical Palladium

abrdn Physical Silver

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Physical Silver are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Abrdn Physical reported solid returns over the last few months and may actually be approaching a breakup point.

abrdn Physical Palladium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days abrdn Physical Palladium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Abrdn Physical is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Abrdn Physical and Abrdn Physical

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

The idea behind abrdn Physical Silver and abrdn Physical Palladium 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.