Correlation Between Delaware Emerging and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Delaware Emerging and Aberdeen Emerging 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 Delaware Emerging and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delaware Emerging Markets and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Delaware Emerging and Aberdeen Emerging 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 Delaware Emerging with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delaware Emerging and Aberdeen Emerging.
Diversification Opportunities for Delaware Emerging and Aberdeen Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Delaware and Aberdeen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Emerging Markets and Aberdeen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markets and Delaware Emerging 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 Delaware Emerging Markets are associated (or correlated) with Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markets has no effect on the direction of Delaware Emerging i.e., Delaware Emerging and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Delaware Emerging and Aberdeen Emerging
Assuming the 90 days horizon Delaware Emerging Markets is expected to generate 1.59 times more return on investment than Aberdeen Emerging. However, Delaware Emerging is 1.59 times more volatile than Aberdeen Emerging Markets. It trades about -0.02 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about -0.11 per unit of risk. If you would invest 2,111 in Delaware Emerging Markets on January 26, 2024 and sell it today you would lose (12.00) from holding Delaware Emerging Markets or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delaware Emerging Markets vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Delaware Emerging Markets |
| Aberdeen Emerging Markets |
Delaware Emerging and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delaware Emerging and Aberdeen Emerging
The main advantage of trading using opposite Delaware Emerging and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delaware Emerging position performs unexpectedly, Aberdeen Emerging 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 Emerging will offset losses from the drop in Aberdeen Emerging's long position.| Delaware Emerging vs. Amana Income Fund | Delaware Emerging vs. Amana Growth Fund | Delaware Emerging vs. Amana Participation Fund | Delaware Emerging vs. HUMANA INC |
| Aberdeen Emerging vs. Amana Income Fund | Aberdeen Emerging vs. Amana Growth Fund | Aberdeen Emerging vs. Amana Participation Fund | Aberdeen Emerging vs. HUMANA INC |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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