Correlation Between Aberdeen Ultra and Alpine Global

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

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

Diversification Opportunities for Aberdeen Ultra and Alpine Global

-0.69

Correlation Coefficient

Aberdeen Ultra  Alpine Global

Excellent diversification

The 3 months correlation between Aberdeen and Alpine is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Ultra Short and Alpine Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Global Infras and Aberdeen Ultra 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 Ultra Short are associated (or correlated) with Alpine Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Global Infras has no effect on the direction of Aberdeen Ultra i.e., Aberdeen Ultra and Alpine Global go up and down completely randomly.

Pair Corralation between Aberdeen Ultra and Alpine Global

Assuming the 90 days horizon Aberdeen Ultra Short is expected to generate 0.1 times more return on investment than Alpine Global. However, Aberdeen Ultra Short is 9.91 times less risky than Alpine Global. It trades about 0.16 of its potential returns per unit of risk. Alpine Global Infrastructure is currently generating about -0.13 per unit of risk. If you would invest  1,004  in Aberdeen Ultra Short on September 14, 2024 and sell it today you would earn a total of  6.00  from holding Aberdeen Ultra Short or generate 0.6% return on investment over 90 days.

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

Aberdeen Ultra Short  vs.  Alpine Global Infrastructure

Aberdeen Ultra Short

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Ultra Short are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Aberdeen Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alpine Global Infras

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpine Global Infrastructure has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alpine Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aberdeen Ultra and Alpine Global

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

The idea behind Aberdeen Ultra Short and Alpine Global Infrastructure 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.