Correlation Between Deutsche Global and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Deutsche Global 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 Deutsche Global and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Global Inflation and Ashmore Emerging Markets, you can compare the effects of market volatilities on Deutsche Global 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 Deutsche Global with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Global and Ashmore Emerging.
Diversification Opportunities for Deutsche Global and Ashmore Emerging
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Deutsche and Ashmore is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Global Inflation 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 Deutsche Global 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 Deutsche Global Inflation 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 Deutsche Global i.e., Deutsche Global and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Deutsche Global and Ashmore Emerging
Assuming the 90 days horizon Deutsche Global Inflation is expected to under-perform the Ashmore Emerging. In addition to that, Deutsche Global is 1.24 times more volatile than Ashmore Emerging Markets. It trades about -0.26 of its total potential returns per unit of risk. Ashmore Emerging Markets is currently generating about -0.18 per unit of volatility. If you would invest 576.00 in Ashmore Emerging Markets on September 26, 2024 and sell it today you would lose (4.00) from holding Ashmore Emerging Markets or give up 0.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Deutsche Global Inflation vs. Ashmore Emerging Markets
Performance |
Timeline |
Deutsche Global Inflation |
Ashmore Emerging Markets |
Deutsche Global and Ashmore Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Deutsche Global and Ashmore Emerging
The main advantage of trading using opposite Deutsche Global and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Global 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.Deutsche Global vs. Wisdomtree Digital Trust | Deutsche Global vs. Wisdomtree Digital Trust | Deutsche Global vs. Wisdomtree Digital Trust | Deutsche Global vs. Wisdomtree Digital Trust |
Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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