Correlation Between Diamond Hill and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Diamond Hill 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 Diamond Hill and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Hill Large and Ashmore Emerging Markets, you can compare the effects of market volatilities on Diamond Hill 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 Diamond Hill with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Ashmore Emerging.
Diversification Opportunities for Diamond Hill and Ashmore Emerging
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Diamond and Ashmore is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Large 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 Diamond Hill 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 Diamond Hill Large 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 Diamond Hill i.e., Diamond Hill and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Diamond Hill and Ashmore Emerging
Assuming the 90 days horizon Diamond Hill Large is expected to generate 3.16 times more return on investment than Ashmore Emerging. However, Diamond Hill is 3.16 times more volatile than Ashmore Emerging Markets. It trades about 0.11 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.22 per unit of risk. If you would invest 1,174 in Diamond Hill Large on September 12, 2024 and sell it today you would earn a total of 233.00 from holding Diamond Hill Large or generate 19.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Hill Large vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Diamond Hill Large |
| Ashmore Emerging Markets |
Diamond Hill and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Ashmore Emerging
The main advantage of trading using opposite Diamond Hill and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill 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.| Diamond Hill vs. Ashmore Emerging Markets | Diamond Hill vs. Locorr Market Trend | Diamond Hill vs. Rbc Emerging Markets | Diamond Hill vs. Investec Emerging Markets |
| Ashmore Emerging vs. Fidelity New Markets | Ashmore Emerging vs. Fidelity New Markets | Ashmore Emerging vs. Fidelity New Markets | Ashmore Emerging vs. SCOR PK |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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