Correlation Between Barings Active and Prudential Short
Can any of the company-specific risk be diversified away by investing in both Barings Active and Prudential 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 Prudential 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 Prudential Short Duration, you can compare the effects of market volatilities on Barings Active and Prudential 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 Prudential Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Prudential Short.
Diversification Opportunities for Barings Active and Prudential Short
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Prudential is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Prudential Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential 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 Prudential Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Short Duration has no effect on the direction of Barings Active i.e., Barings Active and Prudential Short go up and down completely randomly.
Pair Corralation between Barings Active and Prudential Short
Assuming the 90 days horizon Barings Active is expected to generate 1.27 times less return on investment than Prudential Short. But when comparing it to its historical volatility, Barings Active Short is 1.27 times less risky than Prudential Short. It trades about 0.23 of its potential returns per unit of risk. Prudential Short Duration is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 808.00 in Prudential Short Duration on September 13, 2024 and sell it today you would earn a total of 38.00 from holding Prudential Short Duration or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Prudential Short Duration
Performance |
| Timeline |
| Barings Active Short |
| Prudential Short Duration |
Barings Active and Prudential Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Prudential Short
The main advantage of trading using opposite Barings Active and Prudential Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Prudential 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 Prudential Short will offset losses from the drop in Prudential Short'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 |
| Prudential Short vs. Virtus Seix Government | Prudential Short vs. Elfun Government Money | Prudential Short vs. Aig Government Money | Prudential Short vs. Us Government Securities |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |