Correlation Between Black Oak and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Black Oak 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 Black Oak and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Oak Emerging and Ashmore Emerging Markets, you can compare the effects of market volatilities on Black Oak 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 Black Oak with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Ashmore Emerging.
Diversification Opportunities for Black Oak and Ashmore Emerging
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Black and Ashmore is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging 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 Black Oak 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 Black Oak Emerging 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 Black Oak i.e., Black Oak and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Black Oak and Ashmore Emerging
Assuming the 90 days horizon Black Oak is expected to generate 1.0 times less return on investment than Ashmore Emerging. In addition to that, Black Oak is 4.87 times more volatile than Ashmore Emerging Markets. It trades about 0.04 of its total potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.17 per unit of volatility. If you would invest 491.00 in Ashmore Emerging Markets on August 28, 2024 and sell it today you would earn a total of 85.00 from holding Ashmore Emerging Markets or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Oak Emerging vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Black Oak Emerging |
| Ashmore Emerging Markets |
Black Oak and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and Ashmore Emerging
The main advantage of trading using opposite Black Oak and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak 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.| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Live Oak Health |
| Ashmore Emerging vs. Massmutual Premier Diversified | Ashmore Emerging vs. Oaktree Diversifiedome | Ashmore Emerging vs. Western Asset Diversified | Ashmore Emerging vs. Fidelity Advisor Diversified |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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