Correlation Between Ashmore Emerging and Kinetics Global
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Kinetics Global 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 Kinetics Global 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 Kinetics Global Fund, you can compare the effects of market volatilities on Ashmore Emerging and Kinetics Global 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 Kinetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Kinetics Global.
Diversification Opportunities for Ashmore Emerging and Kinetics Global
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ashmore and Kinetics is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global 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 Kinetics Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Global has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Kinetics Global go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Kinetics Global
Assuming the 90 days horizon Ashmore Emerging is expected to generate 30.06 times less return on investment than Kinetics Global. But when comparing it to its historical volatility, Ashmore Emerging Markets is 3.42 times less risky than Kinetics Global. It trades about 0.03 of its potential returns per unit of risk. Kinetics Global Fund is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,482 in Kinetics Global Fund on October 21, 2024 and sell it today you would earn a total of 93.00 from holding Kinetics Global Fund or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Kinetics Global Fund
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Kinetics Global |
Ashmore Emerging and Kinetics Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Kinetics Global
The main advantage of trading using opposite Ashmore Emerging and Kinetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Kinetics Global 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 Kinetics Global will offset losses from the drop in Kinetics Global's long position.The idea behind Ashmore Emerging Markets and Kinetics Global Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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