Correlation Between Ashmore Emerging and Value Equity
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Value Equity 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 Value Equity 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 Value Equity Institutional, you can compare the effects of market volatilities on Ashmore Emerging and Value Equity 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 Value Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Value Equity.
Diversification Opportunities for Ashmore Emerging and Value Equity
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ashmore and Value is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Value Equity Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Equity Institu 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 Value Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Equity Institu has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Value Equity go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Value Equity
Assuming the 90 days horizon Ashmore Emerging is expected to generate 2.4 times less return on investment than Value Equity. But when comparing it to its historical volatility, Ashmore Emerging Markets is 3.48 times less risky than Value Equity. It trades about 0.2 of its potential returns per unit of risk. Value Equity Institutional is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,898 in Value Equity Institutional on September 3, 2024 and sell it today you would earn a total of 282.00 from holding Value Equity Institutional or generate 14.86% 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. Value Equity Institutional
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Value Equity Institu |
Ashmore Emerging and Value Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Value Equity
The main advantage of trading using opposite Ashmore Emerging and Value Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Value Equity 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 Value Equity will offset losses from the drop in Value Equity'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 |
| Value Equity vs. Ab Bond Inflation | Value Equity vs. California Bond Fund | Value Equity vs. Dreyfusstandish Global Fixed | Value Equity vs. Limited Term Tax |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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