Correlation Between Sterling Capital and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Sterling Capital 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 Sterling Capital and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Short and Ashmore Emerging Markets, you can compare the effects of market volatilities on Sterling Capital 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 Sterling Capital with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Ashmore Emerging.
Diversification Opportunities for Sterling Capital and Ashmore Emerging
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and Ashmore is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short 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 Sterling Capital 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 Sterling Capital Short 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 Sterling Capital i.e., Sterling Capital and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Sterling Capital and Ashmore Emerging
Assuming the 90 days horizon Sterling Capital is expected to generate 1.52 times less return on investment than Ashmore Emerging. But when comparing it to its historical volatility, Sterling Capital Short is 2.9 times less risky than Ashmore Emerging. It trades about 0.19 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 473.00 in Ashmore Emerging Markets on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Ashmore Emerging Markets or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Sterling Capital Short |
| Ashmore Emerging Markets |
Sterling Capital and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Ashmore Emerging
The main advantage of trading using opposite Sterling Capital and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital 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.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |