Correlation Between Ab Bond and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Barings 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 Ab Bond and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Barings Emerging Markets, you can compare the effects of market volatilities on Ab Bond and Barings 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 Ab Bond with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Barings Emerging.
Diversification Opportunities for Ab Bond and Barings Emerging
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABNTX and Barings is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Ab Bond i.e., Ab Bond and Barings Emerging go up and down completely randomly.
Pair Corralation between Ab Bond and Barings Emerging
Assuming the 90 days horizon Ab Bond Inflation is expected to generate 0.54 times more return on investment than Barings Emerging. However, Ab Bond Inflation is 1.85 times less risky than Barings Emerging. It trades about 0.11 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 1,014 in Ab Bond Inflation on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Ab Bond Inflation or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Barings Emerging Markets
Performance |
| Timeline |
| Ab Bond Inflation |
| Barings Emerging Markets |
Ab Bond and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Barings Emerging
The main advantage of trading using opposite Ab Bond and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Barings 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Ab Bond vs. Sprott Gold Equity | Ab Bond vs. Short Precious Metals | Ab Bond vs. Great West Goldman Sachs | Ab Bond vs. Goldman Sachs Esg |
| Barings Emerging vs. Artisan High Income | Barings Emerging vs. Federated Ohio Municipal | Barings Emerging vs. Versatile Bond Portfolio | Barings Emerging vs. Ambrus Core Bond |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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