Correlation Between Ashmore Emerging and Capital Growth
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Capital Growth 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 Capital Growth 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 Capital Growth Fund, you can compare the effects of market volatilities on Ashmore Emerging and Capital Growth 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 Capital Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Capital Growth.
Diversification Opportunities for Ashmore Emerging and Capital Growth
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashmore and Capital is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Capital Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Growth 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 Capital Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Growth has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Capital Growth go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Capital Growth
Assuming the 90 days horizon Ashmore Emerging Markets is expected to under-perform the Capital Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ashmore Emerging Markets is 12.2 times less risky than Capital Growth. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Capital Growth Fund is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,431 in Capital Growth Fund on September 1, 2024 and sell it today you would earn a total of 53.00 from holding Capital Growth Fund or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Capital Growth Fund
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Capital Growth |
Ashmore Emerging and Capital Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Capital Growth
The main advantage of trading using opposite Ashmore Emerging and Capital Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Capital Growth 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 Capital Growth will offset losses from the drop in Capital Growth's long position.| Ashmore Emerging vs. Franklin Lifesmart Retirement | Ashmore Emerging vs. Dimensional Retirement Income | Ashmore Emerging vs. Tiaa Cref Lifestyle Moderate | Ashmore Emerging vs. Wisdomtree Siegel Moderate |
| Capital Growth vs. Chestnut Street Exchange | Capital Growth vs. Jpmorgan Trust I | Capital Growth vs. Prudential Government Money | Capital Growth vs. Ashmore Emerging Markets |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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