Correlation Between Ashmore Emerging and Victory Incore

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

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

Diversification Opportunities for Ashmore Emerging and Victory Incore

0.92

Correlation Coefficient

Ashmore Emerging  Victory Incore

Almost no diversification

The 3 months correlation between Ashmore and Victory is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Victory Incore Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Incore and Ashmore Emerging 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 Emerging Markets are associated (or correlated) with Victory Incore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Incore has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Victory Incore go up and down completely randomly.

Pair Corralation between Ashmore Emerging and Victory Incore

Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 2.19 times more return on investment than Victory Incore. However, Ashmore Emerging is 2.19 times more volatile than Victory Incore Fund. It trades about 0.18 of its potential returns per unit of risk. Victory Incore Fund is currently generating about 0.25 per unit of risk. If you would invest  564.00  in Ashmore Emerging Markets on December 29, 2024 and sell it today you would earn a total of  16.00  from holding Ashmore Emerging Markets or generate 2.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Ashmore Emerging Markets  vs.  Victory Incore Fund

Ashmore Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ashmore Emerging Markets are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Ashmore Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Victory Incore

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Incore Fund are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Victory Incore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ashmore Emerging and Victory Incore

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

The idea behind Ashmore Emerging Markets and Victory Incore Fund 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.