Correlation Between Barings Active and Longleaf Partners
Can any of the company-specific risk be diversified away by investing in both Barings Active and Longleaf Partners 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 Longleaf Partners 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 Longleaf Partners Fund, you can compare the effects of market volatilities on Barings Active and Longleaf Partners 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 Longleaf Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Longleaf Partners.
Diversification Opportunities for Barings Active and Longleaf Partners
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barings and Longleaf is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Longleaf Partners Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longleaf Partners 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 Longleaf Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longleaf Partners has no effect on the direction of Barings Active i.e., Barings Active and Longleaf Partners go up and down completely randomly.
Pair Corralation between Barings Active and Longleaf Partners
Assuming the 90 days horizon Barings Active Short is expected to generate 0.14 times more return on investment than Longleaf Partners. However, Barings Active Short is 7.13 times less risky than Longleaf Partners. It trades about 0.26 of its potential returns per unit of risk. Longleaf Partners Fund is currently generating about -0.12 per unit of risk. If you would invest 923.00 in Barings Active Short on November 27, 2024 and sell it today you would earn a total of 5.00 from holding Barings Active Short or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Longleaf Partners Fund
Performance |
| Timeline |
| Barings Active Short |
| Longleaf Partners |
Barings Active and Longleaf Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Longleaf Partners
The main advantage of trading using opposite Barings Active and Longleaf Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Longleaf Partners 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 Longleaf Partners will offset losses from the drop in Longleaf Partners' long position.| Barings Active vs. Sprott Gold Equity | Barings Active vs. Gamco Global Gold | Barings Active vs. Precious Metals And | Barings Active vs. Ocm Mutual Fund |
| Longleaf Partners vs. Vanguard Energy Index | Longleaf Partners vs. Pimco Energy Tactical | Longleaf Partners vs. Fidelity Advisor Energy | Longleaf Partners vs. Gamco Natural Resources |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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