Correlation Between Barings Active and The Short
Can any of the company-specific risk be diversified away by investing in both Barings Active and The Short 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 The Short 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 The Short Term, you can compare the effects of market volatilities on Barings Active and The Short 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 The Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and The Short.
Diversification Opportunities for Barings Active and The Short
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barings and The is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and The Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term 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 The Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term has no effect on the direction of Barings Active i.e., Barings Active and The Short go up and down completely randomly.
Pair Corralation between Barings Active and The Short
Assuming the 90 days horizon Barings Active Short is expected to generate 1.22 times more return on investment than The Short. However, Barings Active is 1.22 times more volatile than The Short Term. It trades about 0.13 of its potential returns per unit of risk. The Short Term is currently generating about 0.07 per unit of risk. If you would invest 916.00 in Barings Active Short on September 2, 2024 and sell it today you would earn a total of 9.00 from holding Barings Active Short or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. The Short Term
Performance |
| Timeline |
| Barings Active Short |
| Short Term |
Barings Active and The Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and The Short
The main advantage of trading using opposite Barings Active and The Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, The Short 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 The Short will offset losses from the drop in The Short's long position.| Barings Active vs. Calamos Dynamic Convertible | Barings Active vs. Ab Bond Inflation | Barings Active vs. Blrc Sgy Mnp | Barings Active vs. Artisan High Income |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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