Correlation Between Ashmore Emerging and Amg River
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Amg River 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 Ashmore Emerging and Amg River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashmore Emerging Markets and Amg River Road, you can compare the effects of market volatilities on Ashmore Emerging and Amg River 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 Ashmore Emerging with a short position of Amg River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Amg River.
Diversification Opportunities for Ashmore Emerging and Amg River
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ashmore and Amg is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Amg River Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg River Road and Ashmore 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 Ashmore Emerging Markets are associated (or correlated) with Amg River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg River Road has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Amg River go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Amg River
Assuming the 90 days horizon Ashmore Emerging is expected to generate 1.37 times less return on investment than Amg River. But when comparing it to its historical volatility, Ashmore Emerging Markets is 3.83 times less risky than Amg River. It trades about 0.17 of its potential returns per unit of risk. Amg River Road is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,459 in Amg River Road on September 12, 2024 and sell it today you would earn a total of 287.00 from holding Amg River Road or generate 19.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Amg River Road
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Amg River Road |
Ashmore Emerging and Amg River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Amg River
The main advantage of trading using opposite Ashmore Emerging and Amg River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Amg River 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 Amg River will offset losses from the drop in Amg River's long position.| Ashmore Emerging vs. T Rowe Price | Ashmore Emerging vs. Versatile Bond Portfolio | Ashmore Emerging vs. T Rowe Price | Ashmore Emerging vs. Alliancebernstein Bond |
| Amg River vs. Vanguard Small Cap Value | Amg River vs. Vanguard Small Cap Value | Amg River vs. Us Small Cap | Amg River vs. Us Targeted Value |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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