Correlation Between Ashmore Emerging and Delaware Emerging

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

Diversification Opportunities for Ashmore Emerging and Delaware Emerging

0.91

Correlation Coefficient

Ashmore Emerging  Delaware Emerging

Almost no diversification

The 3 months correlation between Ashmore and Delaware is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Delaware Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Emerging Markets 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 Delaware Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Emerging Markets has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Delaware Emerging go up and down completely randomly.

Pair Corralation between Ashmore Emerging and Delaware Emerging

Assuming the 90 days horizon Ashmore Emerging Markets is expected to under-perform the Delaware Emerging. In addition to that, Ashmore Emerging is 2.57 times more volatile than Delaware Emerging Markets. It trades about -0.3 of its total potential returns per unit of risk. Delaware Emerging Markets is currently generating about -0.43 per unit of volatility. If you would invest  773.00  in Delaware Emerging Markets on October 12, 2024 and sell it today you would lose (9.00) from holding Delaware Emerging Markets or give up 1.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ashmore Emerging Markets  vs.  Delaware Emerging Markets

Ashmore Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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 technical and fundamental indicators, Ashmore Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Delaware Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delaware Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Delaware Emerging 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 Delaware Emerging

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

The idea behind Ashmore Emerging Markets and Delaware Emerging Markets 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.