Correlation Between Barings Active and Federated Short
Can any of the company-specific risk be diversified away by investing in both Barings Active and Federated 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 Federated 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 Federated Short Term Income, you can compare the effects of market volatilities on Barings Active and Federated 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 Federated Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Federated Short.
Diversification Opportunities for Barings Active and Federated Short
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Federated is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Federated Short Term Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated 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 Federated Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short Term has no effect on the direction of Barings Active i.e., Barings Active and Federated Short go up and down completely randomly.
Pair Corralation between Barings Active and Federated Short
Assuming the 90 days horizon Barings Active Short is expected to generate 1.01 times more return on investment than Federated Short. However, Barings Active is 1.01 times more volatile than Federated Short Term Income. It trades about 0.21 of its potential returns per unit of risk. Federated Short Term Income is currently generating about 0.18 per unit of risk. If you would invest 833.00 in Barings Active Short on September 12, 2024 and sell it today you would earn a total of 93.00 from holding Barings Active Short or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Federated Short Term Income
Performance |
| Timeline |
| Barings Active Short |
| Federated Short Term |
Barings Active and Federated Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Federated Short
The main advantage of trading using opposite Barings Active and Federated Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Federated 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 Federated Short will offset losses from the drop in Federated Short's long position.| Barings Active vs. SCOR PK | Barings Active vs. Morningstar Unconstrained Allocation | Barings Active vs. Via Renewables | Barings Active vs. Bondbloxx ETF Trust |
| Federated Short vs. Federated Hermes Mdt | Federated Short vs. Federated Mdt Large | Federated Short vs. Federated High Income | Federated Short vs. Federated Hermes Sdg |
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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