Correlation Between Pimco Emerging and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Pimco Emerging 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 Pimco Emerging and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Emerging Markets and Ashmore Emerging Markets, you can compare the effects of market volatilities on Pimco Emerging 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 Pimco Emerging with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Emerging and Ashmore Emerging.
Diversification Opportunities for Pimco Emerging and Ashmore Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Ashmore is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Emerging Markets 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 Pimco 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 Pimco Emerging Markets 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 Pimco Emerging i.e., Pimco Emerging and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Pimco Emerging and Ashmore Emerging
Assuming the 90 days horizon Pimco Emerging Markets is expected to generate 0.8 times more return on investment than Ashmore Emerging. However, Pimco Emerging Markets is 1.24 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 0.01 per unit of risk. If you would invest 712.00 in Pimco Emerging Markets on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Pimco Emerging Markets or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Emerging Markets vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Pimco Emerging Markets |
| Ashmore Emerging Markets |
Pimco Emerging and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Emerging and Ashmore Emerging
The main advantage of trading using opposite Pimco Emerging and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Emerging 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.| Pimco Emerging vs. Arrow Managed Futures | Pimco Emerging vs. Ab Value Fund | Pimco Emerging vs. Rbb Fund | Pimco Emerging vs. Iaadx |
| Ashmore Emerging vs. Fidelity Advisor Energy | Ashmore Emerging vs. Hennessy Bp Energy | Ashmore Emerging vs. Energy Services Fund | Ashmore Emerging vs. Dreyfus Natural Resources |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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