Correlation Between Ashmore Emerging and Pace International
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Pace International 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 Pace International 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 Pace International Emerging, you can compare the effects of market volatilities on Ashmore Emerging and Pace International 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 Pace International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Pace International.
Diversification Opportunities for Ashmore Emerging and Pace International
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ashmore and Pace is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Pace International Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace International 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 Pace International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace International has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Pace International go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Pace International
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.26 times more return on investment than Pace International. However, Ashmore Emerging Markets is 3.8 times less risky than Pace International. It trades about 0.19 of its potential returns per unit of risk. Pace International Emerging is currently generating about 0.04 per unit of risk. If you would invest 522.00 in Ashmore Emerging Markets on November 8, 2024 and sell it today you would earn a total of 56.00 from holding Ashmore Emerging Markets or generate 10.73% 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. Pace International Emerging
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Pace International |
Ashmore Emerging and Pace International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Pace International
The main advantage of trading using opposite Ashmore Emerging and Pace International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Pace International 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 Pace International will offset losses from the drop in Pace International's long position.| Ashmore Emerging vs. Doubleline Core Fixed | Ashmore Emerging vs. Us Vector Equity | Ashmore Emerging vs. Dws Equity Sector | Ashmore Emerging vs. Gmo International Equity |
| Pace International vs. Qs Defensive Growth | Pace International vs. Ab International Growth | Pace International vs. Tfa Alphagen Growth | Pace International vs. Transamerica Capital Growth |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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