Correlation Between Barings Active and Locorr Longshort
Can any of the company-specific risk be diversified away by investing in both Barings Active and Locorr Longshort 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 Locorr Longshort 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 Locorr Longshort Modities, you can compare the effects of market volatilities on Barings Active and Locorr Longshort 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 Locorr Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Locorr Longshort.
Diversification Opportunities for Barings Active and Locorr Longshort
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Locorr is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Locorr Longshort Modities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Longshort Modities 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 Locorr Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Longshort Modities has no effect on the direction of Barings Active i.e., Barings Active and Locorr Longshort go up and down completely randomly.
Pair Corralation between Barings Active and Locorr Longshort
Assuming the 90 days horizon Barings Active Short is expected to generate 0.55 times more return on investment than Locorr Longshort. However, Barings Active Short is 1.82 times less risky than Locorr Longshort. It trades about 0.17 of its potential returns per unit of risk. Locorr Longshort Modities is currently generating about -0.05 per unit of risk. If you would invest 810.00 in Barings Active Short on August 24, 2024 and sell it today you would earn a total of 113.00 from holding Barings Active Short or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Locorr Longshort Modities
Performance |
| Timeline |
| Barings Active Short |
| Locorr Longshort Modities |
Barings Active and Locorr Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Locorr Longshort
The main advantage of trading using opposite Barings Active and Locorr Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Locorr Longshort 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 Locorr Longshort will offset losses from the drop in Locorr Longshort's long position.| Barings Active vs. Vanguard Institutional Short Term | Barings Active vs. Jhancock Short Duration | Barings Active vs. Locorr Longshort Modities | Barings Active vs. Astor Longshort Fund |
| Locorr Longshort vs. Short Precious Metals | Locorr Longshort vs. Global Gold Fund | Locorr Longshort vs. Oppenheimer Gold Special | Locorr Longshort vs. Goldman Sachs Mlp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |