Correlation Between Chestnut Street and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Chestnut Street 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 Chestnut Street and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and Ashmore Emerging Markets, you can compare the effects of market volatilities on Chestnut Street 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 Chestnut Street with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Ashmore Emerging.
Diversification Opportunities for Chestnut Street and Ashmore Emerging
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chestnut and Ashmore is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange 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 Chestnut Street 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 Chestnut Street Exchange 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 Chestnut Street i.e., Chestnut Street and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Chestnut Street and Ashmore Emerging
Assuming the 90 days horizon Chestnut Street Exchange is expected to generate 5.65 times more return on investment than Ashmore Emerging. However, Chestnut Street is 5.65 times more volatile than Ashmore Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.15 per unit of risk. If you would invest 86,253 in Chestnut Street Exchange on August 24, 2024 and sell it today you would earn a total of 29,687 from holding Chestnut Street Exchange or generate 34.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Chestnut Street Exchange |
| Ashmore Emerging Markets |
Chestnut Street and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Ashmore Emerging
The main advantage of trading using opposite Chestnut Street and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street 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.| Chestnut Street vs. Qs Large Cap | Chestnut Street vs. Federated Mdt Large | Chestnut Street vs. Nuveen Winslow Large Cap | Chestnut Street vs. T Rowe Price |
| Ashmore Emerging vs. Nuveen Short Term | Ashmore Emerging vs. Siit Ultra Short | Ashmore Emerging vs. Touchstone Ultra Short | Ashmore Emerging vs. Guggenheim Long 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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