Correlation Between William Blair and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both William Blair 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 William Blair and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Blair Small and Ashmore Emerging Markets, you can compare the effects of market volatilities on William Blair 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 William Blair with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Blair and Ashmore Emerging.
Diversification Opportunities for William Blair and Ashmore Emerging
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between William and Ashmore is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding William Blair Small 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 William Blair 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 William Blair Small 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 William Blair i.e., William Blair and Ashmore Emerging go up and down completely randomly.
Pair Corralation between William Blair and Ashmore Emerging
Assuming the 90 days horizon William Blair Small is expected to generate 2.76 times more return on investment than Ashmore Emerging. However, William Blair is 2.76 times more volatile than Ashmore Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.09 per unit of risk. If you would invest 2,970 in William Blair Small on November 5, 2024 and sell it today you would earn a total of 51.00 from holding William Blair Small or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Blair Small vs. Ashmore Emerging Markets
Performance |
| Timeline |
| William Blair Small |
| Ashmore Emerging Markets |
William Blair and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Blair and Ashmore Emerging
The main advantage of trading using opposite William Blair and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Blair 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.| William Blair vs. Advent Claymore Convertible | William Blair vs. Columbia Convertible Securities | William Blair vs. Calamos Dynamic Convertible | William Blair vs. Allianzgi Convertible Income |
| Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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