Correlation Between Aberdeen Asia and Cbre Clarion

Can any of the company-specific risk be diversified away by investing in both Aberdeen Asia and Cbre Clarion 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 Cbre Clarion 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 Cbre Clarion Global, you can compare the effects of market volatilities on Aberdeen Asia and Cbre Clarion 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 Cbre Clarion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Asia and Cbre Clarion.

Diversification Opportunities for Aberdeen Asia and Cbre Clarion

0.67

Correlation Coefficient

Aberdeen Asia  Cbre Clarion

Poor diversification

The 3 months correlation between Aberdeen and CBRE is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Asia Pacific If and Cbre Clarion Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cbre Clarion Global 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 Cbre Clarion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cbre Clarion Global has no effect on the direction of Aberdeen Asia i.e., Aberdeen Asia and Cbre Clarion go up and down completely randomly.

Pair Corralation between Aberdeen Asia and Cbre Clarion

Considering the 90-day investment horizon Aberdeen Asia Pacific If is expected to under-perform the Cbre Clarion. But the fund apears to be less risky and, when comparing its historical volatility, Aberdeen Asia Pacific If is 1.3 times less risky than Cbre Clarion. The fund trades about -0.07 of its potential returns per unit of risk. The Cbre Clarion Global is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  552.00  in Cbre Clarion Global on September 5, 2024 and sell it today you would earn a total of  22.00  from holding Cbre Clarion Global or generate 3.99% return on investment over 90 days.

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

Aberdeen Asia Pacific If  vs.  Cbre Clarion Global

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 current stock price disturbance, may contribute to short-term losses for the investors.

Cbre Clarion Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cbre Clarion Global has generated negative risk-adjusted returns adding no value to fund investors. Even with latest unsteady performance, the Fund's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.

Pair Trading with Aberdeen Asia and Cbre Clarion

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

The idea behind Aberdeen Asia Pacific If and Cbre Clarion Global 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.