Correlation Between Ashmore Asset and Dunia Virtual

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

By analyzing existing cross correlation between Ashmore Asset Management and Dunia Virtual Online, you can compare the effects of market volatilities on Ashmore Asset and Dunia Virtual 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 Asset with a short position of Dunia Virtual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Asset and Dunia Virtual.

Diversification Opportunities for Ashmore Asset and Dunia Virtual

0.22

Correlation Coefficient

Ashmore Asset  Dunia Virtual

Modest diversification

The 3 months correlation between Ashmore and Dunia is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Asset Management and Dunia Virtual Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunia Virtual Online and Ashmore 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 Ashmore Asset Management are associated (or correlated) with Dunia Virtual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunia Virtual Online has no effect on the direction of Ashmore Asset i.e., Ashmore Asset and Dunia Virtual go up and down completely randomly.

Pair Corralation between Ashmore Asset and Dunia Virtual

Assuming the 90 days trading horizon Ashmore Asset Management is expected to under-perform the Dunia Virtual. But the stock apears to be less risky and, when comparing its historical volatility, Ashmore Asset Management is 1.02 times less risky than Dunia Virtual. The stock trades about -0.06 of its potential returns per unit of risk. The Dunia Virtual Online is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  23,800  in Dunia Virtual Online on September 14, 2024 and sell it today you would lose (1,600) from holding Dunia Virtual Online or give up 6.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ashmore Asset Management  vs.  Dunia Virtual Online

Ashmore Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ashmore Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Dunia Virtual Online

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunia Virtual Online has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Dunia Virtual is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ashmore Asset and Dunia Virtual

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

The idea behind Ashmore Asset Management and Dunia Virtual Online 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.