Correlation Between Barings Active and Gmo Core
Can any of the company-specific risk be diversified away by investing in both Barings Active and Gmo Core 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 Gmo Core 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 Gmo E Plus, you can compare the effects of market volatilities on Barings Active and Gmo Core 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 Gmo Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Gmo Core.
Diversification Opportunities for Barings Active and Gmo Core
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and Gmo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Gmo E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo E Plus 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 Gmo Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo E Plus has no effect on the direction of Barings Active i.e., Barings Active and Gmo Core go up and down completely randomly.
Pair Corralation between Barings Active and Gmo Core
Assuming the 90 days horizon Barings Active Short is expected to generate 0.39 times more return on investment than Gmo Core. However, Barings Active Short is 2.55 times less risky than Gmo Core. It trades about 0.17 of its potential returns per unit of risk. Gmo E Plus is currently generating about 0.04 per unit of risk. If you would invest 810.00 in Barings Active Short on August 30, 2024 and sell it today you would earn a total of 114.00 from holding Barings Active Short or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Barings Active Short vs. Gmo E Plus
Performance |
| Timeline |
| Barings Active Short |
| Gmo E Plus |
Barings Active and Gmo Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Gmo Core
The main advantage of trading using opposite Barings Active and Gmo Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Gmo Core 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 Gmo Core will offset losses from the drop in Gmo Core's long position.| Barings Active vs. Us Government Securities | Barings Active vs. Prudential Government Income | Barings Active vs. Us Government Plus | Barings Active vs. Us Government Securities |
| Gmo Core vs. Doubleline E Fixed | Gmo Core vs. California Bond Fund | Gmo Core vs. Ultra Short Fixed Income | Gmo Core vs. Ms Global Fixed |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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