Correlation Between Abrdn Bloomberg and Abrdn ETFs

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

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

Diversification Opportunities for Abrdn Bloomberg and Abrdn ETFs

0.93

Correlation Coefficient

Abrdn Bloomberg  Abrdn ETFs

Almost no diversification

The 3 months correlation between Abrdn and Abrdn is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Bloomberg All and abrdn ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn ETFs and Abrdn Bloomberg 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 Bloomberg All are associated (or correlated) with Abrdn ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn ETFs has no effect on the direction of Abrdn Bloomberg i.e., Abrdn Bloomberg and Abrdn ETFs go up and down completely randomly.

Pair Corralation between Abrdn Bloomberg and Abrdn ETFs

Considering the 90-day investment horizon abrdn Bloomberg All is expected to generate 0.54 times more return on investment than Abrdn ETFs. However, abrdn Bloomberg All is 1.85 times less risky than Abrdn ETFs. It trades about -0.06 of its potential returns per unit of risk. abrdn ETFs is currently generating about -0.05 per unit of risk. If you would invest  3,243  in abrdn Bloomberg All on September 5, 2024 and sell it today you would lose (31.00) from holding abrdn Bloomberg All or give up 0.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

abrdn Bloomberg All  vs.  abrdn ETFs

abrdn Bloomberg All

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Bloomberg All are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Abrdn Bloomberg is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

abrdn ETFs

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn ETFs are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Abrdn ETFs is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Abrdn Bloomberg and Abrdn ETFs

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

The idea behind abrdn Bloomberg All and abrdn ETFs 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.