Correlation Between Barings Active and Kentucky Tax
Can any of the company-specific risk be diversified away by investing in both Barings Active and Kentucky Tax 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 Kentucky Tax 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 Kentucky Tax Free Short To Medium, you can compare the effects of market volatilities on Barings Active and Kentucky Tax 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 Kentucky Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Kentucky Tax.
Diversification Opportunities for Barings Active and Kentucky Tax
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barings and Kentucky is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Kentucky Tax Free Short To Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky Tax Free 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 Kentucky Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky Tax Free has no effect on the direction of Barings Active i.e., Barings Active and Kentucky Tax go up and down completely randomly.
Pair Corralation between Barings Active and Kentucky Tax
Assuming the 90 days horizon Barings Active Short is expected to generate 1.22 times more return on investment than Kentucky Tax. However, Barings Active is 1.22 times more volatile than Kentucky Tax Free Short To Medium. It trades about 0.22 of its potential returns per unit of risk. Kentucky Tax Free Short To Medium is currently generating about 0.07 per unit of risk. If you would invest 860.00 in Barings Active Short on September 14, 2024 and sell it today you would earn a total of 66.00 from holding Barings Active Short or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Kentucky Tax Free Short To Med
Performance |
| Timeline |
| Barings Active Short |
| Kentucky Tax Free |
Barings Active and Kentucky Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Kentucky Tax
The main advantage of trading using opposite Barings Active and Kentucky Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Kentucky Tax 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 Kentucky Tax will offset losses from the drop in Kentucky Tax's long position.| Barings Active vs. Champlain Small | Barings Active vs. Franklin Small Cap | Barings Active vs. Touchstone Small Cap | Barings Active vs. Df Dent Small |
| Kentucky Tax vs. Glg Intl Small | Kentucky Tax vs. Cardinal Small Cap | Kentucky Tax vs. Scout Small Cap | Kentucky Tax vs. Siit Small Mid |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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