Correlation Between NYSE Composite and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Ashmore Emerging Markets, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ashmore Emerging.
Diversification Opportunities for NYSE Composite and Ashmore Emerging
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Ashmore is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Ashmore Emerging go up and down completely randomly.
Pair Corralation between NYSE Composite and Ashmore Emerging
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.09 times more return on investment than Ashmore Emerging. However, NYSE Composite is 1.09 times more volatile than Ashmore Emerging Markets. It trades about 0.24 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about -0.28 per unit of risk. If you would invest 1,945,627 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 66,718 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Ashmore Emerging Markets
Performance |
| Timeline |
NYSE Composite and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Ashmore Emerging Markets
Pair trading matchups for Ashmore Emerging
Pair Trading with NYSE Composite and Ashmore Emerging
The main advantage of trading using opposite NYSE Composite and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Ashmore Emerging vs. Pia High Yield | Ashmore Emerging vs. Gmo High Yield | Ashmore Emerging vs. Pimco High Yield | Ashmore Emerging vs. Blackrock High Yield |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Transaction History View history of all your transactions and understand their impact on performance |