Correlation Between Fa 529 and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Fa 529 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 Fa 529 and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and Ashmore Emerging Markets, you can compare the effects of market volatilities on Fa 529 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 Fa 529 with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Ashmore Emerging.
Diversification Opportunities for Fa 529 and Ashmore Emerging
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FFCGX and Ashmore is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive 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 Fa 529 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 Fa 529 Aggressive 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 Fa 529 i.e., Fa 529 and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Fa 529 and Ashmore Emerging
Assuming the 90 days horizon Fa 529 is expected to generate 1.35 times less return on investment than Ashmore Emerging. But when comparing it to its historical volatility, Fa 529 Aggressive is 1.24 times less risky than Ashmore Emerging. It trades about 0.19 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 841.00 in Ashmore Emerging Markets on June 1, 2025 and sell it today you would earn a total of 84.00 from holding Ashmore Emerging Markets or generate 9.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fa 529 Aggressive vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Fa 529 Aggressive |
| Ashmore Emerging Markets |
Fa 529 and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and Ashmore Emerging
The main advantage of trading using opposite Fa 529 and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 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.| Fa 529 vs. Vanguard Total Stock | Fa 529 vs. Vanguard 500 Index | Fa 529 vs. Vanguard Total Stock | Fa 529 vs. Vanguard Total Stock |
| Ashmore Emerging vs. Msift High Yield | Ashmore Emerging vs. Prudential High Yield | Ashmore Emerging vs. Virtus High Yield | Ashmore Emerging vs. Ab High Income |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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