Correlation Between Aquagold International and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Aquagold International 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 Aquagold International and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Ashmore Emerging Markets, you can compare the effects of market volatilities on Aquagold International 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 Aquagold International with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Ashmore Emerging.
Diversification Opportunities for Aquagold International and Ashmore Emerging
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aquagold and Ashmore is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International 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 Aquagold International 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 Aquagold International 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 Aquagold International i.e., Aquagold International and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Aquagold International and Ashmore Emerging
Given the investment horizon of 90 days Aquagold International is expected to under-perform the Ashmore Emerging. In addition to that, Aquagold International is 8.03 times more volatile than Ashmore Emerging Markets. It trades about -0.1 of its total potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.01 per unit of volatility. If you would invest 1,389 in Ashmore Emerging Markets on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Ashmore Emerging Markets or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Aquagold International vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Aquagold International |
| Ashmore Emerging Markets |
Aquagold International and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Ashmore Emerging
The main advantage of trading using opposite Aquagold International and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International 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.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Ashmore Emerging vs. Pace High Yield | Ashmore Emerging vs. Gmo High Yield | Ashmore Emerging vs. Buffalo High Yield | Ashmore Emerging vs. Artisan High Income |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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