Correlation Between Barings Active and Chartwell Short
Can any of the company-specific risk be diversified away by investing in both Barings Active and Chartwell 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 Chartwell 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 Chartwell Short Duration, you can compare the effects of market volatilities on Barings Active and Chartwell 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 Chartwell Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Chartwell Short.
Diversification Opportunities for Barings Active and Chartwell Short
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barings and Chartwell is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Chartwell Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Short Duration 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 Chartwell Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Short Duration has no effect on the direction of Barings Active i.e., Barings Active and Chartwell Short go up and down completely randomly.
Pair Corralation between Barings Active and Chartwell Short
Assuming the 90 days horizon Barings Active is expected to generate 3.88 times less return on investment than Chartwell Short. But when comparing it to its historical volatility, Barings Active Short is 1.3 times less risky than Chartwell Short. It trades about 0.12 of its potential returns per unit of risk. Chartwell Short Duration is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 949.00 in Chartwell Short Duration on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Chartwell Short Duration or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Chartwell Short Duration
Performance |
| Timeline |
| Barings Active Short |
| Chartwell Short Duration |
Barings Active and Chartwell Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Chartwell Short
The main advantage of trading using opposite Barings Active and Chartwell Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Chartwell 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 Chartwell Short will offset losses from the drop in Chartwell Short's long position.| Barings Active vs. Mid Cap Growth Profund | Barings Active vs. Fpa Queens Road | Barings Active vs. Applied Finance Explorer | Barings Active vs. Heartland Value Plus |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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