Correlation Between Transamerica Asset and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Transamerica Asset 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 Transamerica Asset and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Asset Allocation and Ashmore Emerging Markets, you can compare the effects of market volatilities on Transamerica Asset 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 Transamerica Asset with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Asset and Ashmore Emerging.
Diversification Opportunities for Transamerica Asset and Ashmore Emerging
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transamerica and Ashmore is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Asset Allocation 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 Transamerica Asset 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 Transamerica Asset Allocation 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 Transamerica Asset i.e., Transamerica Asset and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Transamerica Asset and Ashmore Emerging
Assuming the 90 days horizon Transamerica Asset Allocation is expected to generate 0.57 times more return on investment than Ashmore Emerging. However, Transamerica Asset Allocation is 1.76 times less risky than Ashmore Emerging. It trades about 0.37 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about -0.19 per unit of risk. If you would invest 1,346 in Transamerica Asset Allocation on September 4, 2024 and sell it today you would earn a total of 51.00 from holding Transamerica Asset Allocation or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Transamerica Asset Allocation vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Transamerica Asset |
| Ashmore Emerging Markets |
Transamerica Asset and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Asset and Ashmore Emerging
The main advantage of trading using opposite Transamerica Asset and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Asset 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.| Transamerica Asset vs. 361 Global Longshort | Transamerica Asset vs. Barings Global Floating | Transamerica Asset vs. Commonwealth Global Fund | Transamerica Asset vs. Ab Global Bond |
| Ashmore Emerging vs. Ab Small Cap | Ashmore Emerging vs. Qs Small Capitalization | Ashmore Emerging vs. Small Cap Value | Ashmore Emerging vs. Touchstone Small Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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