Correlation Between Ashmore Emerging and Western Asset
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Western Asset 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 Western Asset 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 Western Asset Premier, you can compare the effects of market volatilities on Ashmore Emerging and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Western Asset.
Diversification Opportunities for Ashmore Emerging and Western Asset
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashmore and Western is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Western Asset Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Premier 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Premier has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Western Asset go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Western Asset
If you would invest 575.00 in Ashmore Emerging Markets on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Ashmore Emerging Markets or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Western Asset Premier
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Western Asset Premier |
Ashmore Emerging and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Western Asset
The main advantage of trading using opposite Ashmore Emerging and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Ashmore Emerging vs. Icon Information Technology | Ashmore Emerging vs. Science Technology Fund | Ashmore Emerging vs. Columbia Global Technology | Ashmore Emerging vs. Dreyfus Technology Growth |
| Western Asset vs. Calvert Emerging Markets | Western Asset vs. Goldman Sachs Emerging | Western Asset vs. Origin Emerging Markets | Western Asset vs. Ashmore 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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