Correlation Between Ashmore Emerging and Guggenheim High
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Guggenheim High 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 Guggenheim High 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 Guggenheim High Yield, you can compare the effects of market volatilities on Ashmore Emerging and Guggenheim High 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 Guggenheim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Guggenheim High.
Diversification Opportunities for Ashmore Emerging and Guggenheim High
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashmore and Guggenheim is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Guggenheim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim High Yield 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 Guggenheim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim High Yield has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Guggenheim High go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Guggenheim High
Assuming the 90 days horizon Ashmore Emerging is expected to generate 1.71 times less return on investment than Guggenheim High. But when comparing it to its historical volatility, Ashmore Emerging Markets is 1.68 times less risky than Guggenheim High. It trades about 0.22 of its potential returns per unit of risk. Guggenheim High Yield is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 956.00 in Guggenheim High Yield on September 3, 2024 and sell it today you would earn a total of 48.00 from holding Guggenheim High Yield or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Guggenheim High Yield
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Guggenheim High Yield |
Ashmore Emerging and Guggenheim High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Guggenheim High
The main advantage of trading using opposite Ashmore Emerging and Guggenheim High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Guggenheim High 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 Guggenheim High will offset losses from the drop in Guggenheim High'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 |
| Guggenheim High vs. Fidelity Advisor Financial | Guggenheim High vs. Angel Oak Financial | Guggenheim High vs. Mesirow Financial Small | Guggenheim High vs. 1919 Financial Services |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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