Correlation Between Aberdeen Asia and Cornerstone Strategic

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

By analyzing existing cross correlation between Aberdeen Asia Pacific If and Cornerstone Strategic Value, you can compare the effects of market volatilities on Aberdeen Asia and Cornerstone Strategic 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 Asia with a short position of Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Asia and Cornerstone Strategic.

Diversification Opportunities for Aberdeen Asia and Cornerstone Strategic

-0.78

Correlation Coefficient

Aberdeen Asia  Cornerstone Strategic

Pay attention - limited upside

The 3 months correlation between Aberdeen and Cornerstone is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Asia Pacific If and Cornerstone Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic and Aberdeen Asia 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 Asia Pacific If are associated (or correlated) with Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Aberdeen Asia i.e., Aberdeen Asia and Cornerstone Strategic go up and down completely randomly.

Pair Corralation between Aberdeen Asia and Cornerstone Strategic

Considering the 90-day investment horizon Aberdeen Asia Pacific If is expected to under-perform the Cornerstone Strategic. But the fund apears to be less risky and, when comparing its historical volatility, Aberdeen Asia Pacific If is 1.56 times less risky than Cornerstone Strategic. The fund trades about -0.03 of its potential returns per unit of risk. The Cornerstone Strategic Value is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  732.00  in Cornerstone Strategic Value on September 12, 2024 and sell it today you would earn a total of  89.00  from holding Cornerstone Strategic Value or generate 12.16% return on investment over 90 days.

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

Aberdeen Asia Pacific If  vs.  Cornerstone Strategic Value

Aberdeen Asia Pacific

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cornerstone Strategic

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very unsteady essential indicators, Cornerstone Strategic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aberdeen Asia and Cornerstone Strategic

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

The idea behind Aberdeen Asia Pacific If and Cornerstone Strategic Value 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.