Correlation Between Barings Active and Nationwide Small
Can any of the company-specific risk be diversified away by investing in both Barings Active and Nationwide Small 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 Nationwide Small 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 Nationwide Small Cap, you can compare the effects of market volatilities on Barings Active and Nationwide Small 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 Nationwide Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Nationwide Small.
Diversification Opportunities for Barings Active and Nationwide Small
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Nationwide is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Nationwide Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Small Cap 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 Nationwide Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Small Cap has no effect on the direction of Barings Active i.e., Barings Active and Nationwide Small go up and down completely randomly.
Pair Corralation between Barings Active and Nationwide Small
Assuming the 90 days horizon Barings Active Short is expected to generate 0.09 times more return on investment than Nationwide Small. However, Barings Active Short is 10.98 times less risky than Nationwide Small. It trades about 0.18 of its potential returns per unit of risk. Nationwide Small Cap is currently generating about 0.01 per unit of risk. If you would invest 923.00 in Barings Active Short on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Barings Active Short or generate 0.33% 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. Nationwide Small Cap
Performance |
| Timeline |
| Barings Active Short |
| Nationwide Small Cap |
Barings Active and Nationwide Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Nationwide Small
The main advantage of trading using opposite Barings Active and Nationwide Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Nationwide Small 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 Nationwide Small will offset losses from the drop in Nationwide Small's long position.| Barings Active vs. Pax High Yield | Barings Active vs. Jpmorgan High Yield | Barings Active vs. Msift High Yield | Barings Active vs. City National Rochdale |
| Nationwide Small vs. Gabelli Gold Fund | Nationwide Small vs. Europac Gold Fund | Nationwide Small vs. Gold And Precious | Nationwide Small vs. International Investors Gold |
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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