Correlation Between Ashmore Emerging and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Ashmore Emerging and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Floating Rate.
Diversification Opportunities for Ashmore Emerging and Floating Rate
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ashmore and Floating is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Floating Rate go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Floating Rate
Assuming the 90 days horizon Ashmore Emerging is expected to generate 3.46 times less return on investment than Floating Rate. In addition to that, Ashmore Emerging is 1.48 times more volatile than Floating Rate Fund. It trades about 0.04 of its total potential returns per unit of risk. Floating Rate Fund is currently generating about 0.19 per unit of volatility. If you would invest 812.00 in Floating Rate Fund on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Floating Rate Fund or generate 0.62% 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. Floating Rate Fund
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Floating Rate |
Ashmore Emerging and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Floating Rate
The main advantage of trading using opposite Ashmore Emerging and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Ashmore Emerging vs. Sit Emerging Markets | Ashmore Emerging vs. HUMANA INC | Ashmore Emerging vs. Aquagold International | Ashmore Emerging vs. Barloworld Ltd ADR |
| Floating Rate vs. Shelton Emerging Markets | Floating Rate vs. Ashmore Emerging Markets | Floating Rate vs. Artisan Emerging Markets | Floating Rate vs. Rbc Bluebay Emerging |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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