Correlation Between Sustainable Equity and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Sustainable Equity 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 Sustainable Equity and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sustainable Equity Fund and Ashmore Emerging Markets, you can compare the effects of market volatilities on Sustainable Equity 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 Sustainable Equity with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sustainable Equity and Ashmore Emerging.
Diversification Opportunities for Sustainable Equity and Ashmore Emerging
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sustainable and Ashmore is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sustainable Equity Fund 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 Sustainable Equity 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 Sustainable Equity Fund 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 Sustainable Equity i.e., Sustainable Equity and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Sustainable Equity and Ashmore Emerging
Assuming the 90 days horizon Sustainable Equity Fund is expected to generate 2.99 times more return on investment than Ashmore Emerging. However, Sustainable Equity is 2.99 times more volatile than Ashmore Emerging Markets. It trades about 0.17 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.28 per unit of risk. If you would invest 5,815 in Sustainable Equity Fund on September 13, 2024 and sell it today you would earn a total of 109.00 from holding Sustainable Equity Fund or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sustainable Equity Fund vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Sustainable Equity |
| Ashmore Emerging Markets |
Sustainable Equity and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sustainable Equity and Ashmore Emerging
The main advantage of trading using opposite Sustainable Equity and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sustainable Equity 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.| Sustainable Equity vs. Davenport Small Cap | Sustainable Equity vs. Huber Capital Diversified | Sustainable Equity vs. Adams Diversified Equity | Sustainable Equity vs. Small Cap Stock |
| Ashmore Emerging vs. Amg Managers Centersquare | Ashmore Emerging vs. Forum Real Estate | Ashmore Emerging vs. Fidelity Real Estate | Ashmore Emerging vs. Prudential Real Estate |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |