Correlation Between Barings Active and Aquila Three
Can any of the company-specific risk be diversified away by investing in both Barings Active and Aquila Three 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 Active and Aquila Three into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Aquila Three Peaks, you can compare the effects of market volatilities on Barings Active and Aquila Three 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 Active with a short position of Aquila Three. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Aquila Three.
Diversification Opportunities for Barings Active and Aquila Three
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Aquila is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Aquila Three Peaks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Three Peaks and Barings Active 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 Active Short are associated (or correlated) with Aquila Three. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Three Peaks has no effect on the direction of Barings Active i.e., Barings Active and Aquila Three go up and down completely randomly.
Pair Corralation between Barings Active and Aquila Three
Assuming the 90 days horizon Barings Active is expected to generate 10.81 times less return on investment than Aquila Three. But when comparing it to its historical volatility, Barings Active Short is 7.18 times less risky than Aquila Three. It trades about 0.14 of its potential returns per unit of risk. Aquila Three Peaks is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,488 in Aquila Three Peaks on August 29, 2024 and sell it today you would earn a total of 212.00 from holding Aquila Three Peaks or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Aquila Three Peaks
Performance |
| Timeline |
| Barings Active Short |
| Aquila Three Peaks |
Barings Active and Aquila Three Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Aquila Three
The main advantage of trading using opposite Barings Active and Aquila Three positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Aquila Three 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 Aquila Three will offset losses from the drop in Aquila Three's long position.| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
| Aquila Three vs. Fidelity Managed Retirement | Aquila Three vs. Franklin Moderate Allocation | Aquila Three vs. Jp Morgan Smartretirement | Aquila Three vs. Pgim Conservative Retirement |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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