Correlation Between American Beacon and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both American Beacon and Ashmore Emerging 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 American Beacon and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon The and Ashmore Emerging Markets, you can compare the effects of market volatilities on American Beacon and Ashmore Emerging 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 American Beacon with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Ashmore Emerging.
Diversification Opportunities for American Beacon and Ashmore Emerging
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Ashmore is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon The and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets and American Beacon 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 American Beacon The are associated (or correlated) with Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of American Beacon i.e., American Beacon and Ashmore Emerging go up and down completely randomly.
Pair Corralation between American Beacon and Ashmore Emerging
Assuming the 90 days horizon American Beacon The is expected to generate 0.54 times more return on investment than Ashmore Emerging. However, American Beacon The is 1.86 times less risky than Ashmore Emerging. It trades about 0.18 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.0 per unit of risk. If you would invest 2,156 in American Beacon The on September 1, 2024 and sell it today you would earn a total of 307.00 from holding American Beacon The or generate 14.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon The vs. Ashmore Emerging Markets
Performance |
| Timeline |
| American Beacon |
| Ashmore Emerging Markets |
American Beacon and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Ashmore Emerging
The main advantage of trading using opposite American Beacon and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging's long position.| American Beacon vs. Artisan High Income | American Beacon vs. Western Asset High | American Beacon vs. Dunham High Yield | American Beacon vs. Mesirow Financial High |
| Ashmore Emerging vs. American Beacon The | Ashmore Emerging vs. Invesco Small Cap | Ashmore Emerging vs. Invesco Asia Pacific | Ashmore Emerging vs. Invesco European Growth |
Check out your portfolio center.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.
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