Correlation Between Dws Equity and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Dws Equity 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 Dws Equity and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dws Equity Sector and Ashmore Emerging Markets, you can compare the effects of market volatilities on Dws Equity 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 Dws Equity with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dws Equity and Ashmore Emerging.
Diversification Opportunities for Dws Equity and Ashmore Emerging
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dws and Ashmore is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dws Equity Sector 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 Dws Equity 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 Dws Equity Sector 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 Dws Equity i.e., Dws Equity and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Dws Equity and Ashmore Emerging
Assuming the 90 days horizon Dws Equity Sector is expected to generate 1.92 times more return on investment than Ashmore Emerging. However, Dws Equity is 1.92 times more volatile than Ashmore Emerging Markets. It trades about 0.27 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.16 per unit of risk. If you would invest 1,817 in Dws Equity Sector on November 3, 2024 and sell it today you would earn a total of 66.00 from holding Dws Equity Sector or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dws Equity Sector vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Dws Equity Sector |
| Ashmore Emerging Markets |
Dws Equity and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dws Equity and Ashmore Emerging
The main advantage of trading using opposite Dws Equity and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Equity 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.| Dws Equity vs. Icon Financial Fund | Dws Equity vs. Blackstone Secured Lending | Dws Equity vs. Financial Industries Fund | Dws Equity vs. Angel Oak Financial |
| Ashmore Emerging vs. Specialized Technology Fund | Ashmore Emerging vs. Vanguard Information Technology | Ashmore Emerging vs. Blackrock Science Technology | Ashmore Emerging vs. Allianzgi Technology Fund |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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