Correlation Between Ashmore Emerging and Small Cap
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Small Cap 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 Small Cap 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 Small Cap Growth, you can compare the effects of market volatilities on Ashmore Emerging and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Small Cap.
Diversification Opportunities for Ashmore Emerging and Small Cap
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashmore and Small is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Growth 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Growth has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Small Cap go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Small Cap
Assuming the 90 days horizon Ashmore Emerging Markets is expected to under-perform the Small Cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ashmore Emerging Markets is 27.31 times less risky than Small Cap. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Small Cap Growth is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,852 in Small Cap Growth on September 3, 2024 and sell it today you would earn a total of 171.00 from holding Small Cap Growth or generate 9.23% 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. Small Cap Growth
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Small Cap Growth |
Ashmore Emerging and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Small Cap
The main advantage of trading using opposite Ashmore Emerging and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Ashmore Emerging vs. Fidelity New Markets | Ashmore Emerging vs. Fidelity New Markets | Ashmore Emerging vs. Fidelity New Markets | Ashmore Emerging vs. Fidelity New Markets |
| Small Cap vs. Goldman Sachs Real | Small Cap vs. Commonwealth Real Estate | Small Cap vs. Tiaa Cref Real Estate | Small Cap vs. Vanguard Reit Index |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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