Correlation Between Dunham Emerging and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Dunham Emerging 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 Dunham Emerging and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Emerging Markets and Ashmore Emerging Markets, you can compare the effects of market volatilities on Dunham Emerging 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 Dunham Emerging with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Emerging and Ashmore Emerging.
Diversification Opportunities for Dunham Emerging and Ashmore Emerging
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Ashmore is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Emerging Markets 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 Dunham Emerging 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 Dunham Emerging Markets 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 Dunham Emerging i.e., Dunham Emerging and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Dunham Emerging and Ashmore Emerging
Assuming the 90 days horizon Dunham Emerging Markets is expected to generate about the same return on investment as Ashmore Emerging Markets. However, Dunham Emerging is 2.54 times more volatile than Ashmore Emerging Markets. It trades about -0.2 of its potential returns per unit of risk. Ashmore Emerging Markets is currently producing about -0.52 per unit of risk. If you would invest 850.00 in Ashmore Emerging Markets on October 9, 2024 and sell it today you would lose (24.00) from holding Ashmore Emerging Markets or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Emerging Markets vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Dunham Emerging Markets |
| Ashmore Emerging Markets |
Dunham Emerging and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Emerging and Ashmore Emerging
The main advantage of trading using opposite Dunham Emerging and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Emerging 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.| Dunham Emerging vs. Dunham Dynamic Macro | Dunham Emerging vs. Dunham Porategovernment Bond | Dunham Emerging vs. Dunham Focused Large | Dunham Emerging vs. Dunham International Opportunity |
| Ashmore Emerging vs. Wilmington Diversified Income | Ashmore Emerging vs. Pimco Diversified Income | Ashmore Emerging vs. Wells Fargo Diversified | Ashmore Emerging vs. Wealthbuilder Conservative Allocation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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