Correlation Between Matson Money and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Matson Money and Ashmore Emerging 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 Matson Money and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Equity and Ashmore Emerging Markets, you can compare the effects of market volatilities on Matson Money and Ashmore Emerging 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 Matson Money with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Ashmore Emerging.
Diversification Opportunities for Matson Money and Ashmore Emerging
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Matson and Ashmore is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets and Matson Money 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 Matson Money Equity are associated (or correlated) with Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Matson Money i.e., Matson Money and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Matson Money and Ashmore Emerging
Assuming the 90 days horizon Matson Money Equity is expected to under-perform the Ashmore Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Matson Money Equity is 1.1 times less risky than Ashmore Emerging. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Ashmore Emerging Markets is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,418 in Ashmore Emerging Markets on September 12, 2024 and sell it today you would lose (15.00) from holding Ashmore Emerging Markets or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matson Money Equity vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Matson Money Equity |
| Ashmore Emerging Markets |
Matson Money and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Ashmore Emerging
The main advantage of trading using opposite Matson Money and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging's long position.| Matson Money vs. Vanguard Total Stock | Matson Money vs. Vanguard 500 Index | Matson Money vs. Vanguard Total Stock | Matson Money vs. Vanguard Total Stock |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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