Correlation Between Ashmore Emerging and Dreyfus Natural
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Dreyfus Natural 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 Dreyfus Natural 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 Dreyfus Natural Resources, you can compare the effects of market volatilities on Ashmore Emerging and Dreyfus Natural 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 Dreyfus Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Dreyfus Natural.
Diversification Opportunities for Ashmore Emerging and Dreyfus Natural
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashmore and Dreyfus is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Dreyfus Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Natural Resources 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 Dreyfus Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Natural Resources has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Dreyfus Natural go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Dreyfus Natural
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.36 times more return on investment than Dreyfus Natural. However, Ashmore Emerging Markets is 2.75 times less risky than Dreyfus Natural. It trades about 0.12 of its potential returns per unit of risk. Dreyfus Natural Resources is currently generating about -0.02 per unit of risk. If you would invest 392.00 in Ashmore Emerging Markets on September 12, 2024 and sell it today you would earn a total of 93.00 from holding Ashmore Emerging Markets or generate 23.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Dreyfus Natural Resources
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Dreyfus Natural Resources |
Ashmore Emerging and Dreyfus Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Dreyfus Natural
The main advantage of trading using opposite Ashmore Emerging and Dreyfus Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Dreyfus Natural 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 Dreyfus Natural will offset losses from the drop in Dreyfus Natural's long position.| Ashmore Emerging vs. Dreyfus Natural Resources | Ashmore Emerging vs. Franklin Natural Resources | Ashmore Emerging vs. Invesco Energy Fund | Ashmore Emerging vs. Calvert Global Energy |
| Dreyfus Natural vs. Hsbc Government Money | Dreyfus Natural vs. Us Government Securities | Dreyfus Natural vs. Virtus Seix Government | Dreyfus Natural vs. Payden Government Fund |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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