Correlation Between Ashmore Emerging and Nationwide Mid

Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Nationwide Mid 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 Nationwide Mid 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 Nationwide Mid Cap, you can compare the effects of market volatilities on Ashmore Emerging and Nationwide Mid 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 Nationwide Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Nationwide Mid.

Diversification Opportunities for Ashmore Emerging and Nationwide Mid

0.14

Correlation Coefficient

Ashmore Emerging  Nationwide Mid

Average diversification

The 3 months correlation between Ashmore and Nationwide is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Nationwide Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Mid Cap 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 Nationwide Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Mid Cap has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Nationwide Mid go up and down completely randomly.

Pair Corralation between Ashmore Emerging and Nationwide Mid

Assuming the 90 days horizon Ashmore Emerging is expected to generate 1.01 times less return on investment than Nationwide Mid. But when comparing it to its historical volatility, Ashmore Emerging Markets is 4.38 times less risky than Nationwide Mid. It trades about 0.12 of its potential returns per unit of risk. Nationwide Mid Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,452  in Nationwide Mid Cap on September 22, 2024 and sell it today you would earn a total of  190.00  from holding Nationwide Mid Cap or generate 13.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Ashmore Emerging Markets  vs.  Nationwide Mid Cap

Ashmore Emerging Markets

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ashmore Emerging Markets are ranked lower than 2 (%) 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.

Nationwide Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ashmore Emerging and Nationwide Mid

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

The idea behind Ashmore Emerging Markets and Nationwide Mid Cap 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.