Correlation Between Gmo High and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Gmo High 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 Gmo High and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Ashmore Emerging Markets, you can compare the effects of market volatilities on Gmo High 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 Gmo High with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Ashmore Emerging.
Diversification Opportunities for Gmo High and Ashmore Emerging
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gmo and Ashmore is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield 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 Gmo High 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 Gmo High Yield 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 Gmo High i.e., Gmo High and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Gmo High and Ashmore Emerging
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.19 times more return on investment than Ashmore Emerging. However, Gmo High Yield is 5.31 times less risky than Ashmore Emerging. It trades about 0.23 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about -0.21 per unit of risk. If you would invest 1,786 in Gmo High Yield on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Gmo High Yield or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Gmo High Yield |
| Ashmore Emerging Markets |
Gmo High and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Ashmore Emerging
The main advantage of trading using opposite Gmo High and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High 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.| Gmo High vs. Lifestyle Ii Moderate | Gmo High vs. Franklin Lifesmart Retirement | Gmo High vs. Pgim Conservative Retirement | Gmo High vs. Target Retirement 2040 |
| Ashmore Emerging vs. Advent Claymore Convertible | Ashmore Emerging vs. Putnam Convertible Incm Gwth | Ashmore Emerging vs. Calamos Dynamic Convertible | Ashmore Emerging vs. Absolute Convertible Arbitrage |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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