Correlation Between Ashmore Emerging and American Century

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

Diversification Opportunities for Ashmore Emerging and American Century

0.0

Correlation Coefficient

Ashmore Emerging  American Century

Pay attention - limited upside

The 3 months correlation between Ashmore and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and American Century Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Inv 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Inv has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and American Century go up and down completely randomly.

Pair Corralation between Ashmore Emerging and American Century

If you would invest  874.00  in Ashmore Emerging Markets on November 29, 2024 and sell it today you would earn a total of  8.00  from holding Ashmore Emerging Markets or generate 0.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	77.42%
Values	Daily Returns

Ashmore Emerging Markets  vs.  American Century Investment

Ashmore Emerging Markets

Risk-Adjusted Performance

Solid

Over the last 90 days Ashmore Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. 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.

American Century Inv

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Century Investment has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, American Century 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 American Century

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

The idea behind Ashmore Emerging Markets and American Century Investment 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..