Correlation Between Ab Select and Barings Active
Can any of the company-specific risk be diversified away by investing in both Ab Select and Barings Active 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 Select and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Longshort and Barings Active Short, you can compare the effects of market volatilities on Ab Select and Barings Active 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 Select with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Barings Active.
Diversification Opportunities for Ab Select and Barings Active
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASCLX and Barings is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short and Ab Select 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 Select Longshort are associated (or correlated) with Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Ab Select i.e., Ab Select and Barings Active go up and down completely randomly.
Pair Corralation between Ab Select and Barings Active
Assuming the 90 days horizon Ab Select Longshort is expected to generate 4.54 times more return on investment than Barings Active. However, Ab Select is 4.54 times more volatile than Barings Active Short. It trades about 0.14 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.08 per unit of risk. If you would invest 1,369 in Ab Select Longshort on August 24, 2024 and sell it today you would earn a total of 25.00 from holding Ab Select Longshort or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ab Select Longshort vs. Barings Active Short
Performance |
| Timeline |
| Ab Select Longshort |
| Barings Active Short |
Ab Select and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Barings Active
The main advantage of trading using opposite Ab Select and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Barings Active 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 Active will offset losses from the drop in Barings Active's long position.| Ab Select vs. Neuberger Berman Long | Ab Select vs. Neuberger Berman Long | Ab Select vs. Neuberger Berman Long | Ab Select vs. Aqr Long Short Equity |
| Barings Active vs. Vanguard Institutional Short Term | Barings Active vs. Jhancock Short Duration | Barings Active vs. Locorr Longshort Modities | Barings Active vs. Astor Longshort Fund |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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