Correlation Between Barings Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Barings Global and Western Asset 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 Barings Global and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Short and Western Asset Global, you can compare the effects of market volatilities on Barings Global and Western Asset 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 Barings Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Western Asset.
Diversification Opportunities for Barings Global and Western Asset
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Western is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Short and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Barings Global 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 Barings Global Short are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Barings Global i.e., Barings Global and Western Asset go up and down completely randomly.
Pair Corralation between Barings Global and Western Asset
Considering the 90-day investment horizon Barings Global Short is expected to generate 1.86 times more return on investment than Western Asset. However, Barings Global is 1.86 times more volatile than Western Asset Global. It trades about 0.17 of its potential returns per unit of risk. Western Asset Global is currently generating about 0.08 per unit of risk. If you would invest 1,512 in Barings Global Short on August 31, 2024 and sell it today you would earn a total of 67.00 from holding Barings Global Short or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Short vs. Western Asset Global
Performance |
| Timeline |
| Barings Global Short |
| Western Asset Global |
Barings Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Western Asset
The main advantage of trading using opposite Barings Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Barings Global vs. Eaton Vance National | Barings Global vs. Invesco High Income | Barings Global vs. Blackrock Muniholdings Ny | Barings Global vs. Nuveen California Select |
| Western Asset vs. MFS Investment Grade | Western Asset vs. Eaton Vance Municipal | Western Asset vs. DTF Tax Free | Western Asset vs. HUMANA INC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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