Correlation Between Ashmore Emerging and Americafirst Income
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Americafirst Income 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 Americafirst Income 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 Americafirst Income Fund, you can compare the effects of market volatilities on Ashmore Emerging and Americafirst Income 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 Americafirst Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Americafirst Income.
Diversification Opportunities for Ashmore Emerging and Americafirst Income
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashmore and Americafirst is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Americafirst Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Income 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 Americafirst Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Income has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Americafirst Income go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Americafirst Income
Assuming the 90 days horizon Ashmore Emerging is expected to generate 13.95 times less return on investment than Americafirst Income. But when comparing it to its historical volatility, Ashmore Emerging Markets is 6.81 times less risky than Americafirst Income. It trades about 0.07 of its potential returns per unit of risk. Americafirst Income Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 456.00 in Americafirst Income Fund on September 6, 2024 and sell it today you would earn a total of 30.00 from holding Americafirst Income Fund or generate 6.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Ashmore Emerging Markets vs. Americafirst Income Fund
Performance |
Timeline |
Ashmore Emerging Markets |
Americafirst Income |
Ashmore Emerging and Americafirst Income Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ashmore Emerging and Americafirst Income
The main advantage of trading using opposite Ashmore Emerging and Americafirst Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Americafirst Income 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 Americafirst Income will offset losses from the drop in Americafirst Income's long position.Ashmore Emerging vs. Ancorathelen Small Mid Cap | Ashmore Emerging vs. Small Midcap Dividend Income | Ashmore Emerging vs. Touchstone Small Cap | Ashmore Emerging vs. Baird Smallmid Cap |
Americafirst Income vs. Franklin High Yield | Americafirst Income vs. Gamco Global Telecommunications | Americafirst Income vs. Intermediate Term Tax Free Bond | Americafirst Income vs. Ishares Municipal Bond |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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