Correlation Between XAI Octagon and Aberdeen Global

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

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

Diversification Opportunities for XAI Octagon and Aberdeen Global

0.2

Correlation Coefficient

XAI Octagon  Aberdeen Global

Modest diversification

The 3 months correlation between XAI and Aberdeen is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating and Aberdeen Global Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Dynamic and XAI Octagon 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 XAI Octagon Floating 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 Dynamic has no effect on the direction of XAI Octagon i.e., XAI Octagon and Aberdeen Global go up and down completely randomly.

Pair Corralation between XAI Octagon and Aberdeen Global

Given the investment horizon of 90 days XAI Octagon is expected to generate 2.18 times less return on investment than Aberdeen Global. In addition to that, XAI Octagon is 1.21 times more volatile than Aberdeen Global Dynamic. It trades about 0.04 of its total potential returns per unit of risk. Aberdeen Global Dynamic is currently generating about 0.11 per unit of volatility. If you would invest  978.00  in Aberdeen Global Dynamic on September 11, 2024 and sell it today you would earn a total of  38.00  from holding Aberdeen Global Dynamic or generate 3.89% return on investment over 90 days.

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

XAI Octagon Floating  vs.  Aberdeen Global Dynamic

XAI Octagon Floating

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XAI Octagon Floating are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, XAI Octagon is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Aberdeen Global Dynamic

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global Dynamic are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with XAI Octagon and Aberdeen Global

The main advantage of trading using opposite XAI Octagon and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XAI Octagon 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 XAI Octagon Floating and Aberdeen Global Dynamic 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..