Correlation Between Ashmore Emerging and Us Government
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Ashmore Emerging and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Us Government.
Diversification Opportunities for Ashmore Emerging and Us Government
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ashmore and UGSCX is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Us Government go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Us Government
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.62 times more return on investment than Us Government. However, Ashmore Emerging Markets is 1.6 times less risky than Us Government. It trades about 0.13 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.01 per unit of risk. If you would invest 490.00 in Ashmore Emerging Markets on September 14, 2024 and sell it today you would earn a total of 89.00 from holding Ashmore Emerging Markets or generate 18.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Us Government Securities
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Us Government Securities |
Ashmore Emerging and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Us Government
The main advantage of trading using opposite Ashmore Emerging and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government'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 |
| Us Government vs. Pace International Emerging | Us Government vs. Vy Jpmorgan Emerging | Us Government vs. Ashmore Emerging Markets | Us Government vs. Angel Oak Multi Strategy |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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