Correlation Between Ab Global and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Ab Global and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Ashmore Emerging Markets, you can compare the effects of market volatilities on Ab Global 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 Ab Global with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Ashmore Emerging.
Diversification Opportunities for Ab Global and Ashmore Emerging
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CABIX and Ashmore is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk 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 Ab Global 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 Ab Global Risk 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 Ab Global i.e., Ab Global and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Ab Global and Ashmore Emerging
Assuming the 90 days horizon Ab Global Risk is expected to generate 2.28 times more return on investment than Ashmore Emerging. However, Ab Global is 2.28 times more volatile than Ashmore Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.21 per unit of risk. If you would invest 1,584 in Ab Global Risk on August 26, 2024 and sell it today you would earn a total of 199.00 from holding Ab Global Risk or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Ab Global Risk |
| Ashmore Emerging Markets |
Ab Global and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Ashmore Emerging
The main advantage of trading using opposite Ab Global and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.| Ab Global vs. Locorr Longshort Modities | Ab Global vs. Siit Ultra Short | Ab Global vs. Ultra Short Fixed Income | Ab Global vs. Maryland Short Term Tax Free |
| Ashmore Emerging vs. Rbc Bluebay Emerging | Ashmore Emerging vs. Calvert Emerging Markets | Ashmore Emerging vs. Angel Oak Multi Strategy | Ashmore Emerging vs. Western Assets Emerging |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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