Correlation Between Technology Telecommunicatio and Aberdeen Global

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

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

Diversification Opportunities for Technology Telecommunicatio and Aberdeen Global

-0.36

Correlation Coefficient

Technology Telecommunicatio  Aberdeen Global

Very good diversification

The 3 months correlation between Technology and Aberdeen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Technology Telecommunication A and Aberdeen Global IF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global IF and Technology Telecommunicatio 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 Technology Telecommunication Acquisition are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global IF has no effect on the direction of Technology Telecommunicatio i.e., Technology Telecommunicatio and Aberdeen Global go up and down completely randomly.

Pair Corralation between Technology Telecommunicatio and Aberdeen Global

Assuming the 90 days horizon Technology Telecommunication Acquisition is expected to generate 187.93 times more return on investment than Aberdeen Global. However, Technology Telecommunicatio is 187.93 times more volatile than Aberdeen Global IF. It trades about 0.2 of its potential returns per unit of risk. Aberdeen Global IF is currently generating about 0.1 per unit of risk. If you would invest  0.00  in Technology Telecommunication Acquisition on September 3, 2024 and sell it today you would earn a total of  1.32  from holding Technology Telecommunication Acquisition or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	43.75%
Values	Daily Returns

Technology Telecommunication A  vs.  Aberdeen Global IF

Technology Telecommunicatio

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Telecommunication Acquisition are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Technology Telecommunicatio showed solid returns over the last few months and may actually be approaching a breakup point.

Aberdeen Global IF

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global IF are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Aberdeen Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Technology Telecommunicatio and Aberdeen Global

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

The idea behind Technology Telecommunication Acquisition and Aberdeen Global IF 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.