Correlation Between Ashmore Emerging and Absolute Capital
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Absolute Capital 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 Absolute Capital 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 Absolute Capital Asset, you can compare the effects of market volatilities on Ashmore Emerging and Absolute Capital 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 Absolute Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Absolute Capital.
Diversification Opportunities for Ashmore Emerging and Absolute Capital
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ashmore and Absolute is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Absolute Capital Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Capital Asset 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 Absolute Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Capital Asset has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Absolute Capital go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Absolute Capital
Assuming the 90 days horizon Ashmore Emerging is expected to generate 1.91 times less return on investment than Absolute Capital. But when comparing it to its historical volatility, Ashmore Emerging Markets is 2.16 times less risky than Absolute Capital. It trades about 0.1 of its potential returns per unit of risk. Absolute Capital Asset is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 908.00 in Absolute Capital Asset on September 3, 2024 and sell it today you would earn a total of 240.00 from holding Absolute Capital Asset or generate 26.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Absolute Capital Asset
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Absolute Capital Asset |
Ashmore Emerging and Absolute Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Absolute Capital
The main advantage of trading using opposite Ashmore Emerging and Absolute Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Absolute Capital 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 Absolute Capital will offset losses from the drop in Absolute Capital's long position.| Ashmore Emerging vs. Goldman Sachs Growth | Ashmore Emerging vs. Nationwide Growth Fund | Ashmore Emerging vs. Franklin Growth Opportunities | Ashmore Emerging vs. Smallcap Growth Fund |
| Absolute Capital vs. Quantex Fund Retail | Absolute Capital vs. Infrastructure Fund Retail | Absolute Capital vs. Dynamic Growth Fund | Absolute Capital vs. Balanced Fund Retail |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |