Correlation Between Ashmore Emerging and Thrivent Municipal
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Thrivent Municipal 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 Thrivent Municipal 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 Thrivent Municipal Bond, you can compare the effects of market volatilities on Ashmore Emerging and Thrivent Municipal 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 Thrivent Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Thrivent Municipal.
Diversification Opportunities for Ashmore Emerging and Thrivent Municipal
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ashmore and Thrivent is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Thrivent Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Municipal Bond 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 Thrivent Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Municipal Bond has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Thrivent Municipal go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Thrivent Municipal
Assuming the 90 days horizon Ashmore Emerging Markets is expected to under-perform the Thrivent Municipal. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ashmore Emerging Markets is 3.29 times less risky than Thrivent Municipal. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Thrivent Municipal Bond is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,044 in Thrivent Municipal Bond on September 3, 2024 and sell it today you would lose (3.00) from holding Thrivent Municipal Bond or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Thrivent Municipal Bond
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Thrivent Municipal Bond |
Ashmore Emerging and Thrivent Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Thrivent Municipal
The main advantage of trading using opposite Ashmore Emerging and Thrivent Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Thrivent Municipal 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 Thrivent Municipal will offset losses from the drop in Thrivent Municipal'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 |
| Thrivent Municipal vs. Royce Opportunity Fund | Thrivent Municipal vs. Boston Partners Small | Thrivent Municipal vs. Mid Cap Value Profund | Thrivent Municipal vs. American Century Etf |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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