Correlation Between Jhancock Diversified and Ashmore Emerging

Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified and Ashmore 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 Jhancock Diversified and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jhancock Diversified Macro and Ashmore Emerging Markets, you can compare the effects of market volatilities on Jhancock Diversified and Ashmore 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 Jhancock Diversified with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Ashmore Emerging.

Diversification Opportunities for Jhancock Diversified and Ashmore Emerging

0.39

Correlation Coefficient

Jhancock Diversified  Ashmore Emerging

Weak diversification

The 3 months correlation between Jhancock and Ashmore is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets and Jhancock Diversified 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 Jhancock Diversified Macro are associated (or correlated) with Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Jhancock Diversified i.e., Jhancock Diversified and Ashmore Emerging go up and down completely randomly.

Pair Corralation between Jhancock Diversified and Ashmore Emerging

Assuming the 90 days horizon Jhancock Diversified Macro is expected to generate 2.75 times more return on investment than Ashmore Emerging. However, Jhancock Diversified is 2.75 times more volatile than Ashmore Emerging Markets. It trades about 0.21 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.34 per unit of risk. If you would invest  903.00  in Jhancock Diversified Macro on October 25, 2024 and sell it today you would earn a total of  18.00  from holding Jhancock Diversified Macro or generate 1.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Jhancock Diversified Macro  vs.  Ashmore Emerging Markets

Jhancock Diversified

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Diversified Macro are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jhancock Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 basic indicators, Ashmore 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 Jhancock Diversified and Ashmore Emerging

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

The idea behind Jhancock Diversified Macro and Ashmore 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 Transaction History module to view history of all your transactions and understand their impact on performance.