Correlation Between Ashmore Emerging and Transamerica Financial
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Transamerica Financial 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 Transamerica Financial 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 Transamerica Financial Life, you can compare the effects of market volatilities on Ashmore Emerging and Transamerica Financial 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 Transamerica Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Transamerica Financial.
Diversification Opportunities for Ashmore Emerging and Transamerica Financial
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ashmore and Transamerica is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Transamerica Financial Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Financial 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 Transamerica Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Financial has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Transamerica Financial go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Transamerica Financial
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.26 times more return on investment than Transamerica Financial. However, Ashmore Emerging Markets is 3.92 times less risky than Transamerica Financial. It trades about -0.14 of its potential returns per unit of risk. Transamerica Financial Life is currently generating about -0.43 per unit of risk. If you would invest 576.00 in Ashmore Emerging Markets on September 24, 2024 and sell it today you would lose (3.00) from holding Ashmore Emerging Markets or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Transamerica Financial Life
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Transamerica Financial |
Ashmore Emerging and Transamerica Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Transamerica Financial
The main advantage of trading using opposite Ashmore Emerging and Transamerica Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Transamerica Financial 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 Transamerica Financial will offset losses from the drop in Transamerica Financial's long position.| Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets |
| Transamerica Financial vs. Shelton Emerging Markets | Transamerica Financial vs. Origin Emerging Markets | Transamerica Financial vs. Ashmore Emerging Markets | Transamerica Financial vs. T Rowe Price |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |