Correlation Between ANT and Ashmore Emerging

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

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

Diversification Opportunities for ANT and Ashmore Emerging

-0.37

Correlation Coefficient

ANT  Ashmore Emerging

Very good diversification

The 3 months correlation between ANT and Ashmore is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding ANT 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 ANT 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 ANT 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 ANT i.e., ANT and Ashmore Emerging go up and down completely randomly.

Pair Corralation between ANT and Ashmore Emerging

Assuming the 90 days trading horizon ANT is expected to generate 731.28 times more return on investment than Ashmore Emerging. However, ANT is 731.28 times more volatile than Ashmore Emerging Markets. It trades about 0.12 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.23 per unit of risk. If you would invest  933.00  in ANT on October 12, 2024 and sell it today you would lose (786.00) from holding ANT or give up 84.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.3%
Values	Daily Returns

ANT  vs.  Ashmore Emerging Markets

ANT

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ashmore Emerging Markets

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ashmore Emerging Markets are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ashmore Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ANT and Ashmore Emerging

The main advantage of trading using opposite ANT and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT 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.

The idea behind ANT and Ashmore Emerging Markets 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.