Correlation Between Swan Defined and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Swan Defined 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 Swan Defined and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swan Defined Risk and Ashmore Emerging Markets, you can compare the effects of market volatilities on Swan Defined 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 Swan Defined with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swan Defined and Ashmore Emerging.
Diversification Opportunities for Swan Defined and Ashmore Emerging
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Swan and Ashmore is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Swan Defined Risk 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 Swan Defined 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 Swan Defined Risk 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 Swan Defined i.e., Swan Defined and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Swan Defined and Ashmore Emerging
Assuming the 90 days horizon Swan Defined is expected to generate 2.59 times less return on investment than Ashmore Emerging. In addition to that, Swan Defined is 1.59 times more volatile than Ashmore Emerging Markets. It trades about 0.02 of its total potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.08 per unit of volatility. If you would invest 717.00 in Ashmore Emerging Markets on November 2, 2024 and sell it today you would earn a total of 116.00 from holding Ashmore Emerging Markets or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swan Defined Risk vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Swan Defined Risk |
| Ashmore Emerging Markets |
Swan Defined and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swan Defined and Ashmore Emerging
The main advantage of trading using opposite Swan Defined and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Defined 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.| Swan Defined vs. Federated Government Income | Swan Defined vs. Intermediate Government Bond | Swan Defined vs. Payden Government Fund | Swan Defined vs. Aig Government Money |
| Ashmore Emerging vs. Qs Global Equity | Ashmore Emerging vs. Ultra Short Fixed Income | Ashmore Emerging vs. Gmo International Equity | Ashmore Emerging vs. Doubleline Core Fixed |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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