Correlation Between Ashmore Emerging and Blackrock Natural
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Blackrock Natural 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 Blackrock Natural 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 Blackrock Natural Resources, you can compare the effects of market volatilities on Ashmore Emerging and Blackrock Natural 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 Blackrock Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Blackrock Natural.
Diversification Opportunities for Ashmore Emerging and Blackrock Natural
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashmore and Blackrock is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Blackrock Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Natural 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 Blackrock Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Natural has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Blackrock Natural go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Blackrock Natural
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.12 times more return on investment than Blackrock Natural. However, Ashmore Emerging Markets is 8.27 times less risky than Blackrock Natural. It trades about 0.15 of its potential returns per unit of risk. Blackrock Natural Resources is currently generating about 0.01 per unit of risk. If you would invest 795.00 in Ashmore Emerging Markets on August 30, 2024 and sell it today you would earn a total of 83.00 from holding Ashmore Emerging Markets or generate 10.44% 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. Blackrock Natural Resources
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Blackrock Natural |
Ashmore Emerging and Blackrock Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Blackrock Natural
The main advantage of trading using opposite Ashmore Emerging and Blackrock Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Blackrock Natural 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 Blackrock Natural will offset losses from the drop in Blackrock Natural's long position.| Ashmore Emerging vs. Technology Ultrasector Profund | Ashmore Emerging vs. Pgim Jennison Technology | Ashmore Emerging vs. Dreyfus Technology Growth | Ashmore Emerging vs. Global Technology Portfolio |
| Blackrock Natural vs. Materials Portfolio Fidelity | Blackrock Natural vs. Materials Portfolio Fidelity |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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