Correlation Between Aqr Style and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Aqr Style 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 Aqr Style and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Style Premia and Ashmore Emerging Markets, you can compare the effects of market volatilities on Aqr Style 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 Aqr Style with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Style and Ashmore Emerging.
Diversification Opportunities for Aqr Style and Ashmore Emerging
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Ashmore is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Style Premia 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 Aqr Style 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 Aqr Style Premia 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 Aqr Style i.e., Aqr Style and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Aqr Style and Ashmore Emerging
Assuming the 90 days horizon Aqr Style Premia is expected to generate 11.13 times more return on investment than Ashmore Emerging. However, Aqr Style is 11.13 times more volatile than Ashmore Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.18 per unit of risk. If you would invest 601.00 in Aqr Style Premia on September 2, 2024 and sell it today you would earn a total of 208.00 from holding Aqr Style Premia or generate 34.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Style Premia vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Aqr Style Premia |
| Ashmore Emerging Markets |
Aqr Style and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Style and Ashmore Emerging
The main advantage of trading using opposite Aqr Style and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Style 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.| Aqr Style vs. Aqr Large Cap | Aqr Style vs. Aqr Large Cap | Aqr Style vs. Aqr International Defensive | Aqr Style vs. Aqr International Defensive |
| Ashmore Emerging vs. Qs Large Cap | Ashmore Emerging vs. M Large Cap | Ashmore Emerging vs. Fidelity Series 1000 | Ashmore Emerging vs. Qs Large Cap |
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.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |