Correlation Between Ashmore Emerging and Pimco Rae
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Pimco Rae 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 Pimco Rae 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 Pimco Rae Worldwide, you can compare the effects of market volatilities on Ashmore Emerging and Pimco Rae 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 Pimco Rae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Pimco Rae.
Diversification Opportunities for Ashmore Emerging and Pimco Rae
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashmore and Pimco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Pimco Rae Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Rae Worldwide 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 Pimco Rae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Rae Worldwide has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Pimco Rae go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Pimco Rae
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.8 times more return on investment than Pimco Rae. However, Ashmore Emerging Markets is 1.25 times less risky than Pimco Rae. It trades about 0.07 of its potential returns per unit of risk. Pimco Rae Worldwide is currently generating about 0.0 per unit of risk. If you would invest 826.00 in Ashmore Emerging Markets on October 26, 2024 and sell it today you would earn a total of 4.00 from holding Ashmore Emerging Markets or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Pimco Rae Worldwide
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Pimco Rae Worldwide |
Ashmore Emerging and Pimco Rae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Pimco Rae
The main advantage of trading using opposite Ashmore Emerging and Pimco Rae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Pimco Rae 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 Pimco Rae will offset losses from the drop in Pimco Rae's long position.| Ashmore Emerging vs. Victory Rs Partners | Ashmore Emerging vs. Queens Road Small | Ashmore Emerging vs. William Blair Small | Ashmore Emerging vs. Valic Company I |
| Pimco Rae vs. Ashmore Emerging Markets | Pimco Rae vs. Morgan Stanley Emerging | Pimco Rae vs. Barings Emerging Markets | Pimco Rae vs. Wasatch Frontier Emerging |
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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