Correlation Between Kopernik International and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Kopernik International 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 Kopernik International and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kopernik International Fund and Ashmore Emerging Markets, you can compare the effects of market volatilities on Kopernik International 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 Kopernik International with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopernik International and Ashmore Emerging.
Diversification Opportunities for Kopernik International and Ashmore Emerging
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kopernik and Ashmore is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik International Fund 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 Kopernik International 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 Kopernik International Fund 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 Kopernik International i.e., Kopernik International and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Kopernik International and Ashmore Emerging
Assuming the 90 days horizon Kopernik International is expected to generate 3.32 times less return on investment than Ashmore Emerging. But when comparing it to its historical volatility, Kopernik International Fund is 1.41 times less risky than Ashmore Emerging. It trades about 0.02 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 915.00 in Ashmore Emerging Markets on August 30, 2024 and sell it today you would earn a total of 179.00 from holding Ashmore Emerging Markets or generate 19.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kopernik International Fund vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Kopernik International |
| Ashmore Emerging Markets |
Kopernik International and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kopernik International and Ashmore Emerging
The main advantage of trading using opposite Kopernik International and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopernik International 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.| Kopernik International vs. HUMANA INC | Kopernik International vs. Aquagold International | Kopernik International vs. Barloworld Ltd ADR | Kopernik International vs. Morningstar Unconstrained Allocation |
| Ashmore Emerging vs. Vanguard Emerging Markets | Ashmore Emerging vs. Vanguard Emerging Markets | Ashmore Emerging vs. HUMANA INC | Ashmore Emerging vs. Aquagold International |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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