Correlation Between Ashmore Emerging and Northern Small
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Northern Small 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 Northern Small 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 Northern Small Cap, you can compare the effects of market volatilities on Ashmore Emerging and Northern Small 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 Northern Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Northern Small.
Diversification Opportunities for Ashmore Emerging and Northern Small
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ashmore and Northern is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Northern Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Small 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 Northern Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Small Cap has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Northern Small go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Northern Small
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.2 times more return on investment than Northern Small. However, Ashmore Emerging Markets is 5.1 times less risky than Northern Small. It trades about 0.08 of its potential returns per unit of risk. Northern Small Cap is currently generating about 0.0 per unit of risk. If you would invest 516.00 in Ashmore Emerging Markets on October 13, 2024 and sell it today you would earn a total of 56.00 from holding Ashmore Emerging Markets or generate 10.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ashmore Emerging Markets vs. Northern Small Cap
Performance |
Timeline |
Ashmore Emerging Markets |
Northern Small Cap |
Ashmore Emerging and Northern Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ashmore Emerging and Northern Small
The main advantage of trading using opposite Ashmore Emerging and Northern Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Northern Small 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 Northern Small will offset losses from the drop in Northern Small's long position.Ashmore Emerging vs. Ab Small Cap | Ashmore Emerging vs. Touchstone Small Cap | Ashmore Emerging vs. Lebenthal Lisanti Small | Ashmore Emerging vs. Tax Managed Mid Small |
Northern Small vs. Northern Bond Index | Northern Small vs. Northern E Bond | Northern Small vs. Northern Arizona Tax Exempt | Northern Small vs. Northern Emerging Markets |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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