Correlation Between Barings Active and Growth Portfolio
Can any of the company-specific risk be diversified away by investing in both Barings Active and Growth Portfolio 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 Growth Portfolio 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 Growth Portfolio Class, you can compare the effects of market volatilities on Barings Active and Growth Portfolio 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 Growth Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Growth Portfolio.
Diversification Opportunities for Barings Active and Growth Portfolio
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Growth is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Growth Portfolio Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Portfolio Class 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 Growth Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Portfolio Class has no effect on the direction of Barings Active i.e., Barings Active and Growth Portfolio go up and down completely randomly.
Pair Corralation between Barings Active and Growth Portfolio
Assuming the 90 days horizon Barings Active is expected to generate 54.86 times less return on investment than Growth Portfolio. But when comparing it to its historical volatility, Barings Active Short is 15.33 times less risky than Growth Portfolio. It trades about 0.14 of its potential returns per unit of risk. Growth Portfolio Class is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 3,503 in Growth Portfolio Class on August 29, 2024 and sell it today you would earn a total of 879.00 from holding Growth Portfolio Class or generate 25.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Barings Active Short vs. Growth Portfolio Class
Performance |
| Timeline |
| Barings Active Short |
| Growth Portfolio Class |
Barings Active and Growth Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Growth Portfolio
The main advantage of trading using opposite Barings Active and Growth Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Growth Portfolio 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 Growth Portfolio will offset losses from the drop in Growth Portfolio's long position.| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
| Growth Portfolio vs. Alphacentric Lifesci Healthcare | Growth Portfolio vs. Fidelity Advisor Health | Growth Portfolio vs. Lord Abbett Health | Growth Portfolio vs. Health Care Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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