Correlation Between Ashmore Group and Nuveen Missouri

Can any of the company-specific risk be diversified away by investing in both Ashmore Group and Nuveen Missouri 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 Ashmore Group and Nuveen Missouri into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ashmore Group Plc and Nuveen Missouri Quality, you can compare the effects of market volatilities on Ashmore Group and Nuveen Missouri 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 Ashmore Group with a short position of Nuveen Missouri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Group and Nuveen Missouri.

Diversification Opportunities for Ashmore Group and Nuveen Missouri

0.48

Correlation Coefficient

Ashmore Group  Nuveen Missouri

Very weak diversification

The 3 months correlation between Ashmore and Nuveen is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Group Plc and Nuveen Missouri Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Missouri Quality and Ashmore Group 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 Ashmore Group Plc are associated (or correlated) with Nuveen Missouri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Missouri Quality has no effect on the direction of Ashmore Group i.e., Ashmore Group and Nuveen Missouri go up and down completely randomly.

Pair Corralation between Ashmore Group and Nuveen Missouri

Assuming the 90 days horizon Ashmore Group Plc is expected to under-perform the Nuveen Missouri. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ashmore Group Plc is 2.04 times less risky than Nuveen Missouri. The pink sheet trades about -0.16 of its potential returns per unit of risk. The Nuveen Missouri Quality is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,114  in Nuveen Missouri Quality on December 29, 2024 and sell it today you would lose (89.00) from holding Nuveen Missouri Quality or give up 7.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.08%
Values	Daily Returns

Ashmore Group Plc  vs.  Nuveen Missouri Quality

Ashmore Group Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashmore Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Nuveen Missouri Quality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Missouri Quality has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

Pair Trading with Ashmore Group and Nuveen Missouri

The main advantage of trading using opposite Ashmore Group and Nuveen Missouri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Group position performs unexpectedly, Nuveen Missouri 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 Nuveen Missouri will offset losses from the drop in Nuveen Missouri's long position.

The idea behind Ashmore Group Plc and Nuveen Missouri Quality pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.