Correlation Between Largecap Value and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Largecap Value 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 Largecap Value and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Largecap Value Fund and Ashmore Emerging Markets, you can compare the effects of market volatilities on Largecap Value 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 Largecap Value with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Largecap Value and Ashmore Emerging.
Diversification Opportunities for Largecap Value and Ashmore Emerging
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Largecap and Ashmore is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Largecap Value 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 Largecap Value 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 Largecap Value 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 Largecap Value i.e., Largecap Value and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Largecap Value and Ashmore Emerging
Assuming the 90 days horizon Largecap Value Fund is expected to generate 2.7 times more return on investment than Ashmore Emerging. However, Largecap Value is 2.7 times more volatile than Ashmore Emerging Markets. It trades about 0.07 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.13 per unit of risk. If you would invest 1,781 in Largecap Value Fund on September 13, 2024 and sell it today you would earn a total of 491.00 from holding Largecap Value Fund or generate 27.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Largecap Value Fund vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Largecap Value |
| Ashmore Emerging Markets |
Largecap Value and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Largecap Value and Ashmore Emerging
The main advantage of trading using opposite Largecap Value and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Largecap Value 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.| Largecap Value vs. Ashmore Emerging Markets | Largecap Value vs. Ab All Market | Largecap Value vs. Calvert Developed Market | Largecap Value vs. Rbc Emerging Markets |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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