Correlation Between Ashmore Emerging and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Oakmark International 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 Oakmark International 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 Oakmark International Small, you can compare the effects of market volatilities on Ashmore Emerging and Oakmark International 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 Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Oakmark International.
Diversification Opportunities for Ashmore Emerging and Oakmark International
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ashmore and Oakmark is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Oakmark International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International 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 Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Oakmark International go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Oakmark International
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.06 times more return on investment than Oakmark International. However, Ashmore Emerging Markets is 15.79 times less risky than Oakmark International. It trades about -0.1 of its potential returns per unit of risk. Oakmark International Small is currently generating about -0.06 per unit of risk. If you would invest 882.00 in Ashmore Emerging Markets on September 5, 2024 and sell it today you would lose (1.00) from holding Ashmore Emerging Markets or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Oakmark International Small
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Oakmark International |
Ashmore Emerging and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Oakmark International
The main advantage of trading using opposite Ashmore Emerging and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Oakmark International 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 Oakmark International will offset losses from the drop in Oakmark International'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 |
| Oakmark International vs. General Money Market | Oakmark International vs. Ashmore Emerging Markets | Oakmark International vs. Elfun Government Money | Oakmark International vs. Wt Mutual Fund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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