Correlation Between Ashmore Emerging and Touchstone Dividend
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Touchstone Dividend 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 Touchstone Dividend 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 Touchstone Dividend Equity, you can compare the effects of market volatilities on Ashmore Emerging and Touchstone Dividend 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 Touchstone Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Touchstone Dividend.
Diversification Opportunities for Ashmore Emerging and Touchstone Dividend
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ashmore and Touchstone is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Touchstone Dividend Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Dividend 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 Touchstone Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Dividend has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Touchstone Dividend go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Touchstone Dividend
Assuming the 90 days horizon Ashmore Emerging is expected to generate 1.02 times less return on investment than Touchstone Dividend. But when comparing it to its historical volatility, Ashmore Emerging Markets is 3.31 times less risky than Touchstone Dividend. It trades about 0.24 of its potential returns per unit of risk. Touchstone Dividend Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,617 in Touchstone Dividend Equity on September 15, 2024 and sell it today you would earn a total of 241.00 from holding Touchstone Dividend Equity or generate 14.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Touchstone Dividend Equity
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Touchstone Dividend |
Ashmore Emerging and Touchstone Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Touchstone Dividend
The main advantage of trading using opposite Ashmore Emerging and Touchstone Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Touchstone Dividend 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 Touchstone Dividend will offset losses from the drop in Touchstone Dividend's long position.| Ashmore Emerging vs. Rbb Fund | Ashmore Emerging vs. Commodities Strategy Fund | Ashmore Emerging vs. Semiconductor Ultrasector Profund | Ashmore Emerging vs. Century Small Cap |
| Touchstone Dividend vs. Ashmore Emerging Markets | Touchstone Dividend vs. Ep Emerging Markets | Touchstone Dividend vs. Shelton Emerging Markets | Touchstone Dividend vs. Investec Emerging Markets |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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