Correlation Between Ashmore Emerging and Clearbridge International
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Clearbridge 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 Clearbridge 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 Clearbridge International Value, you can compare the effects of market volatilities on Ashmore Emerging and Clearbridge 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 Clearbridge International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Clearbridge International.
Diversification Opportunities for Ashmore Emerging and Clearbridge International
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ashmore and Clearbridge is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Clearbridge International Valu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge 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 Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Clearbridge International go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Clearbridge International
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.06 times more return on investment than Clearbridge International. However, Ashmore Emerging Markets is 15.55 times less risky than Clearbridge International. It trades about -0.1 of its potential returns per unit of risk. Clearbridge International Value is currently generating about -0.03 per unit of risk. If you would invest 882.00 in Ashmore Emerging Markets on September 2, 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 | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Clearbridge International Valu
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Clearbridge International |
Ashmore Emerging and Clearbridge International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Clearbridge International
The main advantage of trading using opposite Ashmore Emerging and Clearbridge International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Clearbridge 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 Clearbridge International will offset losses from the drop in Clearbridge International's long position.| Ashmore Emerging vs. Qs Large Cap | Ashmore Emerging vs. M Large Cap | Ashmore Emerging vs. Fidelity Series 1000 | Ashmore Emerging vs. Qs Large Cap |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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