Correlation Between Pioneer Diversified and Ashmore Emerging

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

Diversification Opportunities for Pioneer Diversified and Ashmore Emerging

0.55

Correlation Coefficient

Pioneer Diversified  Ashmore Emerging

Very weak diversification

The 3 months correlation between Pioneer and Ashmore is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Diversified High 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 Pioneer 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 Pioneer Diversified High 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 Pioneer Diversified i.e., Pioneer Diversified and Ashmore Emerging go up and down completely randomly.

Pair Corralation between Pioneer Diversified and Ashmore Emerging

Assuming the 90 days horizon Pioneer Diversified High is expected to under-perform the Ashmore Emerging. In addition to that, Pioneer Diversified is 4.05 times more volatile than Ashmore Emerging Markets. It trades about -0.34 of its total potential returns per unit of risk. Ashmore Emerging Markets is currently generating about -0.41 per unit of volatility. If you would invest  579.00  in Ashmore Emerging Markets on October 8, 2024 and sell it today you would lose (7.00) from holding Ashmore Emerging Markets or give up 1.21% of portfolio value over 90 days.

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

Pioneer Diversified High  vs.  Ashmore Emerging Markets

Pioneer Diversified High

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 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.

Pair Trading with Pioneer Diversified and Ashmore Emerging

The main advantage of trading using opposite Pioneer Diversified and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer 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 Pioneer Diversified High 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.