Correlation Between Barings Active and Ivy Natural
Can any of the company-specific risk be diversified away by investing in both Barings Active and Ivy Natural 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 Ivy Natural 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 Ivy Natural Resources, you can compare the effects of market volatilities on Barings Active and Ivy Natural 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 Ivy Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Ivy Natural.
Diversification Opportunities for Barings Active and Ivy Natural
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Ivy is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Ivy Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Natural Resources 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 Ivy Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Natural Resources has no effect on the direction of Barings Active i.e., Barings Active and Ivy Natural go up and down completely randomly.
Pair Corralation between Barings Active and Ivy Natural
Assuming the 90 days horizon Barings Active Short is expected to generate 0.11 times more return on investment than Ivy Natural. However, Barings Active Short is 8.74 times less risky than Ivy Natural. It trades about 0.23 of its potential returns per unit of risk. Ivy Natural Resources is currently generating about 0.01 per unit of risk. If you would invest 891.00 in Barings Active Short on September 1, 2024 and sell it today you would earn a total of 34.00 from holding Barings Active Short or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Barings Active Short vs. Ivy Natural Resources
Performance |
| Timeline |
| Barings Active Short |
| Ivy Natural Resources |
Barings Active and Ivy Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Ivy Natural
The main advantage of trading using opposite Barings Active and Ivy Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Ivy Natural 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 Ivy Natural will offset losses from the drop in Ivy Natural's long position.| Barings Active vs. Ab Bond Inflation | Barings Active vs. Western Asset Inflation | Barings Active vs. Blackrock Inflation Protected | Barings Active vs. Aqr Managed Futures |
| Ivy Natural vs. Quantitative Longshort Equity | Ivy Natural vs. Barings Active Short | Ivy Natural vs. Maryland Short Term Tax Free | Ivy Natural vs. Federated Ultrashort Bond |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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