Correlation Between Dreyfus Technology and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology 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 Dreyfus Technology and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Technology Growth and Ashmore Emerging Markets, you can compare the effects of market volatilities on Dreyfus Technology 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 Dreyfus Technology with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Ashmore Emerging.
Diversification Opportunities for Dreyfus Technology and Ashmore Emerging
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dreyfus and Ashmore is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth 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 Dreyfus Technology 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 Dreyfus Technology Growth 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 Dreyfus Technology i.e., Dreyfus Technology and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Ashmore Emerging
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 11.49 times more return on investment than Ashmore Emerging. However, Dreyfus Technology is 11.49 times more volatile than Ashmore Emerging Markets. It trades about 0.09 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.16 per unit of risk. If you would invest 4,475 in Dreyfus Technology Growth on November 27, 2024 and sell it today you would earn a total of 3,279 from holding Dreyfus Technology Growth or generate 73.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.17% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Ashmore Emerging Markets |
Risk-Adjusted Performance
OK
Weak | Strong |
Dreyfus Technology and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Ashmore Emerging
The main advantage of trading using opposite Dreyfus Technology and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology 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.| Dreyfus Technology vs. Real Estate Ultrasector | Dreyfus Technology vs. Tiaa Cref Real Estate | Dreyfus Technology vs. Rreef Property Trust | Dreyfus Technology vs. Global Real Estate |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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