Correlation Between M Large and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both M Large 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 M Large and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Large Cap and Ashmore Emerging Markets, you can compare the effects of market volatilities on M Large 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 M Large with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and Ashmore Emerging.
Diversification Opportunities for M Large and Ashmore Emerging
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MTCGX and Ashmore is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap 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 M Large 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 M Large Cap 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 M Large i.e., M Large and Ashmore Emerging go up and down completely randomly.
Pair Corralation between M Large and Ashmore Emerging
Assuming the 90 days horizon M Large Cap is expected to generate 3.06 times more return on investment than Ashmore Emerging. However, M Large is 3.06 times more volatile than Ashmore Emerging Markets. It trades about 0.14 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.0 per unit of risk. If you would invest 3,459 in M Large Cap on September 12, 2024 and sell it today you would earn a total of 329.00 from holding M Large Cap or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
M Large Cap vs. Ashmore Emerging Markets
Performance |
| Timeline |
| M Large Cap |
| Ashmore Emerging Markets |
M Large and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Large and Ashmore Emerging
The main advantage of trading using opposite M Large and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Large 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.| M Large vs. Artisan Select Equity | M Large vs. Sarofim Equity | M Large vs. Huber Capital Equity | M Large vs. Touchstone International Equity |
| Ashmore Emerging vs. Avantis Large Cap | Ashmore Emerging vs. Qs Large Cap | Ashmore Emerging vs. M Large Cap | Ashmore Emerging vs. Fidelity Series 1000 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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