Correlation Between Aberdeen Emerging and Delaware Emerging
Can any of the company-specific risk be diversified away by investing in both Aberdeen Emerging and Delaware 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 Aberdeen Emerging and Delaware Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Emerging Markets and Delaware Emerging Markets, you can compare the effects of market volatilities on Aberdeen Emerging and Delaware 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 Aberdeen Emerging with a short position of Delaware Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Emerging and Delaware Emerging.
Diversification Opportunities for Aberdeen Emerging and Delaware Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aberdeen and Delaware is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Emerging Markets and Delaware Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Emerging Markets and Aberdeen 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 Aberdeen Emerging Markets are associated (or correlated) with Delaware Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Emerging Markets has no effect on the direction of Aberdeen Emerging i.e., Aberdeen Emerging and Delaware Emerging go up and down completely randomly.
Pair Corralation between Aberdeen Emerging and Delaware Emerging
Assuming the 90 days horizon Aberdeen Emerging Markets is expected to under-perform the Delaware Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aberdeen Emerging Markets is 1.65 times less risky than Delaware Emerging. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Delaware Emerging Markets is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,106 in Delaware Emerging Markets on January 25, 2024 and sell it today you would earn a total of 9.00 from holding Delaware Emerging Markets or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Emerging Markets vs. Delaware Emerging Markets
Performance |
| Timeline |
| Aberdeen Emerging Markets |
| Delaware Emerging Markets |
Aberdeen Emerging and Delaware Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Emerging and Delaware Emerging
The main advantage of trading using opposite Aberdeen Emerging and Delaware Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Emerging position performs unexpectedly, Delaware 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 Delaware Emerging will offset losses from the drop in Delaware Emerging's long position.| Aberdeen Emerging vs. Amana Income Fund | Aberdeen Emerging vs. Amana Growth Fund | Aberdeen Emerging vs. Amana Participation Fund | Aberdeen Emerging vs. HUMANA INC |
| Delaware Emerging vs. Amana Income Fund | Delaware Emerging vs. Amana Growth Fund | Delaware Emerging vs. Amana Participation Fund | Delaware 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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