Correlation Between Ashmore Emerging and Large Cap
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Large 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 Large 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 Large Cap Value, you can compare the effects of market volatilities on Ashmore Emerging and Large 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Large Cap.
Diversification Opportunities for Ashmore Emerging and Large Cap
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ashmore and Large is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Large Cap go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Large Cap
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.05 times more return on investment than Large Cap. However, Ashmore Emerging Markets is 20.0 times less risky than Large Cap. It trades about 0.24 of its potential returns per unit of risk. Large Cap Value is currently generating about -0.05 per unit of risk. If you would invest 856.00 in Ashmore Emerging Markets on September 12, 2024 and sell it today you would earn a total of 26.00 from holding Ashmore Emerging Markets or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Large Cap Value
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Large Cap Value |
Ashmore Emerging and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Large Cap
The main advantage of trading using opposite Ashmore Emerging and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Large 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 Large Cap will offset losses from the drop in Large Cap's long position.| Ashmore Emerging vs. Voya High Yield | Ashmore Emerging vs. Buffalo High Yield | Ashmore Emerging vs. Msift High Yield | Ashmore Emerging vs. T Rowe Price |
| Large Cap vs. Fidelity Sai Convertible | Large Cap vs. Advent Claymore Convertible | Large Cap vs. Absolute Convertible Arbitrage | Large Cap vs. Calamos Dynamic Convertible |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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