Correlation Between Barings Active and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Ashmore Emerging Markets, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Ashmore Emerging.
Diversification Opportunities for Barings Active and Ashmore Emerging
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barings and Ashmore is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active 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 Barings Active 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 Barings Active 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 Barings Active i.e., Barings Active and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Barings Active and Ashmore Emerging
Assuming the 90 days horizon Barings Active Short is expected to generate 0.37 times more return on investment than Ashmore Emerging. However, Barings Active Short is 2.72 times less risky than Ashmore Emerging. It trades about 0.04 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about -0.1 per unit of risk. If you would invest 921.00 in Barings Active Short on August 26, 2024 and sell it today you would earn a total of 1.00 from holding Barings Active Short or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Barings Active Short |
| Ashmore Emerging Markets |
Barings Active and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Ashmore Emerging
The main advantage of trading using opposite Barings Active and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Global Floating | Barings Active vs. Barings Global Floating |
| Ashmore Emerging vs. Rbc Short Duration | Ashmore Emerging vs. Astor Longshort Fund | Ashmore Emerging vs. Ab Select Longshort | Ashmore Emerging vs. Barings Active Short |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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