Correlation Between Avantis Large and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Avantis Large 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 Avantis Large and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Large Cap and Ashmore Emerging Markets, you can compare the effects of market volatilities on Avantis Large 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 Avantis Large with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Large and Ashmore Emerging.
Diversification Opportunities for Avantis Large and Ashmore Emerging
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Avantis and Ashmore is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap 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 Avantis Large 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 Avantis Large Cap 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 Avantis Large i.e., Avantis Large and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Avantis Large and Ashmore Emerging
Assuming the 90 days horizon Avantis Large Cap is expected to under-perform the Ashmore Emerging. In addition to that, Avantis Large is 2.9 times more volatile than Ashmore Emerging Markets. It trades about -0.05 of its total potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.16 per unit of volatility. If you would invest 484.00 in Ashmore Emerging Markets on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Ashmore Emerging Markets or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Avantis Large Cap vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Avantis Large Cap |
| Ashmore Emerging Markets |
Avantis Large and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Large and Ashmore Emerging
The main advantage of trading using opposite Avantis Large and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Large 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.| Avantis Large vs. Ab Global Real | Avantis Large vs. Ab Global Bond | Avantis Large vs. Barings Global Floating | Avantis Large vs. Franklin Mutual Global |
| Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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