Correlation Between Third Avenue and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Third Avenue 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 Third Avenue and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Third Avenue Small Cap and Ashmore Emerging Markets, you can compare the effects of market volatilities on Third Avenue 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 Third Avenue with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Third Avenue and Ashmore Emerging.
Diversification Opportunities for Third Avenue and Ashmore Emerging
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Third and ASHMORE is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Third Avenue Small Cap 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 Third Avenue 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 Third Avenue Small Cap 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 Third Avenue i.e., Third Avenue and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Third Avenue and Ashmore Emerging
Assuming the 90 days horizon Third Avenue is expected to generate 1.88 times less return on investment than Ashmore Emerging. In addition to that, Third Avenue is 1.13 times more volatile than Ashmore Emerging Markets. It trades about 0.08 of its total potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.16 per unit of volatility. If you would invest 1,339 in Ashmore Emerging Markets on March 30, 2025 and sell it today you would earn a total of 200.00 from holding Ashmore Emerging Markets or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Third Avenue Small Cap vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Third Avenue Small |
| Ashmore Emerging Markets |
Third Avenue and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Third Avenue and Ashmore Emerging
The main advantage of trading using opposite Third Avenue and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Third Avenue 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.| Third Avenue vs. Third Avenue Value | Third Avenue vs. Third Avenue Real | Third Avenue vs. Muhlenkamp Fund Institutional | Third Avenue vs. Longleaf Partners Fund |
| Ashmore Emerging vs. Vanguard Emerging Markets | Ashmore Emerging vs. Vanguard Emerging Markets | Ashmore Emerging vs. Vanguard Emerging Markets | Ashmore Emerging vs. Vanguard 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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