Correlation Between Western Asset and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Ashmore Emerging Markets, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ashmore Emerging.
Diversification Opportunities for Western Asset and Ashmore Emerging
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Ashmore is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified 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 Western Asset 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 Western Asset Diversified 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 Western Asset i.e., Western Asset and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Western Asset and Ashmore Emerging
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Ashmore Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Diversified is 1.5 times less risky than Ashmore Emerging. The mutual fund trades about -0.49 of its potential returns per unit of risk. The Ashmore Emerging Markets is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 645.00 in Ashmore Emerging Markets on January 1, 2025 and sell it today you would earn a total of 8.00 from holding Ashmore Emerging Markets or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset Diversified vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Western Asset Diversified |
| Ashmore Emerging Markets |
Western Asset and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Ashmore Emerging
The main advantage of trading using opposite Western Asset and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. United Kingdom Small | Western Asset vs. Legg Mason Partners | Western Asset vs. Transamerica International Small | Western Asset vs. Nt International Small Mid |
| Ashmore Emerging vs. Tweedy Browne Global | Ashmore Emerging vs. Ab Global Bond | Ashmore Emerging vs. Investec Global Franchise | Ashmore Emerging vs. Gmo Global Equity |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |