Correlation Between Payden Emerging and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Payden Emerging 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 Payden Emerging and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Emerging Markets and Ashmore Emerging Markets, you can compare the effects of market volatilities on Payden Emerging 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 Payden Emerging with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Emerging and Ashmore Emerging.
Diversification Opportunities for Payden Emerging and Ashmore Emerging
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Payden and Ashmore is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Payden Emerging Markets 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 Payden 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 Payden Emerging Markets 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 Payden Emerging i.e., Payden Emerging and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Payden Emerging and Ashmore Emerging
Assuming the 90 days horizon Payden Emerging Markets is expected to generate 0.34 times more return on investment than Ashmore Emerging. However, Payden Emerging Markets is 2.97 times less risky than Ashmore Emerging. It trades about 0.56 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.15 per unit of risk. If you would invest 853.00 in Payden Emerging Markets on June 9, 2025 and sell it today you would earn a total of 32.00 from holding Payden Emerging Markets or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Emerging Markets vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Payden Emerging Markets |
| Ashmore Emerging Markets |
Payden Emerging and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Emerging and Ashmore Emerging
The main advantage of trading using opposite Payden Emerging and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Emerging 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.| Payden Emerging vs. Ab Government Exchange | Payden Emerging vs. Fidelity Money Market | Payden Emerging vs. Vanguard Money Market | Payden Emerging vs. Profunds Money |
| Ashmore Emerging vs. Franklin Emerging Market | Ashmore Emerging vs. Investec Emerging Markets | Ashmore Emerging vs. Shelton Emerging Markets | Ashmore Emerging vs. Ep 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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