Correlation Between Barloworld and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Barloworld 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 Barloworld and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and Ashmore Emerging Markets, you can compare the effects of market volatilities on Barloworld 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 Barloworld with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Ashmore Emerging.
Diversification Opportunities for Barloworld and Ashmore Emerging
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barloworld and Ashmore is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR 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 Barloworld 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 Barloworld Ltd ADR 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 Barloworld i.e., Barloworld and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Barloworld and Ashmore Emerging
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 34.94 times more return on investment than Ashmore Emerging. However, Barloworld is 34.94 times more volatile than Ashmore Emerging Markets. It trades about 0.03 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.09 per unit of risk. If you would invest 537.00 in Barloworld Ltd ADR on November 28, 2024 and sell it today you would lose (12.00) from holding Barloworld Ltd ADR or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 44.63% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Barloworld ADR |
| Ashmore Emerging Markets |
Barloworld and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Ashmore Emerging
The main advantage of trading using opposite Barloworld and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld 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.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Ashmore Emerging vs. T Rowe Price | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. T Rowe Price | Ashmore Emerging vs. Ultrasmall Cap Profund Ultrasmall Cap |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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