Correlation Between Ashmore Emerging and Highland Merger
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Highland Merger 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 Highland Merger 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 Highland Merger Arbitrage, you can compare the effects of market volatilities on Ashmore Emerging and Highland Merger 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 Highland Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Highland Merger.
Diversification Opportunities for Ashmore Emerging and Highland Merger
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashmore and Highland is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Highland Merger Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Merger Arbitrage 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 Highland Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Merger Arbitrage has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Highland Merger go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Highland Merger
Assuming the 90 days horizon Ashmore Emerging Markets is expected to under-perform the Highland Merger. In addition to that, Ashmore Emerging is 1.12 times more volatile than Highland Merger Arbitrage. It trades about -0.08 of its total potential returns per unit of risk. Highland Merger Arbitrage is currently generating about 0.11 per unit of volatility. If you would invest 1,982 in Highland Merger Arbitrage on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Highland Merger Arbitrage or generate 0.4% 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. Highland Merger Arbitrage
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Highland Merger Arbitrage |
Ashmore Emerging and Highland Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Highland Merger
The main advantage of trading using opposite Ashmore Emerging and Highland Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Highland Merger 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 Highland Merger will offset losses from the drop in Highland Merger'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 |
| Highland Merger vs. Prudential Government Money | Highland Merger vs. Wt Mutual Fund | Highland Merger vs. Ashmore Emerging Markets | Highland Merger vs. Transamerica Funds |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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