Correlation Between Transamerica Emerging and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Transamerica 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 Transamerica 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 Transamerica Emerging Markets and Ashmore Emerging Markets, you can compare the effects of market volatilities on Transamerica 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 Transamerica Emerging with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Emerging and Ashmore Emerging.
Diversification Opportunities for Transamerica Emerging and Ashmore Emerging
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Transamerica and Ashmore is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica 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 Transamerica 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 Transamerica 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 Transamerica Emerging i.e., Transamerica Emerging and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Transamerica Emerging and Ashmore Emerging
Assuming the 90 days horizon Transamerica Emerging Markets is expected to under-perform the Ashmore Emerging. In addition to that, Transamerica Emerging is 4.15 times more volatile than Ashmore Emerging Markets. It trades about -0.15 of its total potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.0 per unit of volatility. If you would invest 576.00 in Ashmore Emerging Markets on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Ashmore Emerging Markets or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Emerging Markets vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Transamerica Emerging |
| Ashmore Emerging Markets |
Transamerica Emerging and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Emerging and Ashmore Emerging
The main advantage of trading using opposite Transamerica Emerging and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica 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.| Transamerica Emerging vs. Vanguard Emerging Markets | Transamerica Emerging vs. Vanguard Emerging Markets | Transamerica Emerging vs. HUMANA INC | Transamerica Emerging vs. Aquagold International |
| Ashmore Emerging vs. Financial Industries Fund | Ashmore Emerging vs. Mesirow Financial Small | Ashmore Emerging vs. T Rowe Price | Ashmore Emerging vs. Transamerica Funds |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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