Correlation Between Ashmore Emerging and Us Global
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Us Global 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 Us Global 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 Us Global Investors, you can compare the effects of market volatilities on Ashmore Emerging and Us Global 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 Us Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Us Global.
Diversification Opportunities for Ashmore Emerging and Us Global
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ashmore and USLUX is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Us Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Global Investors 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 Us Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Global Investors has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Us Global go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Us Global
Assuming the 90 days horizon Ashmore Emerging is expected to generate 1.12 times less return on investment than Us Global. But when comparing it to its historical volatility, Ashmore Emerging Markets is 2.63 times less risky than Us Global. It trades about 0.07 of its potential returns per unit of risk. Us Global Investors is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,859 in Us Global Investors on October 25, 2024 and sell it today you would earn a total of 240.00 from holding Us Global Investors or generate 12.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Us Global Investors
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Us Global Investors |
Ashmore Emerging and Us Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Us Global
The main advantage of trading using opposite Ashmore Emerging and Us Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Us Global 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 Us Global will offset losses from the drop in Us Global's long position.| Ashmore Emerging vs. Ab Government Exchange | Ashmore Emerging vs. Intermediate Government Bond | Ashmore Emerging vs. Federated Government Ultrashort | Ashmore Emerging vs. Aig Government Money |
| Us Global vs. Federated Hermes Conservative | Us Global vs. Guidepath Conservative Income | Us Global vs. Conservative Balanced Allocation | Us Global vs. Voya Retirement Servative |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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