Correlation Between Barings Active and Jennison Natural
Can any of the company-specific risk be diversified away by investing in both Barings Active and Jennison 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 Jennison 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 Jennison Natural Resources, you can compare the effects of market volatilities on Barings Active and Jennison 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 Jennison Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Jennison Natural.
Diversification Opportunities for Barings Active and Jennison Natural
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Jennison is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Jennison Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jennison Natural Res 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 Jennison Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jennison Natural Res has no effect on the direction of Barings Active i.e., Barings Active and Jennison Natural go up and down completely randomly.
Pair Corralation between Barings Active and Jennison Natural
Assuming the 90 days horizon Barings Active Short is expected to under-perform the Jennison Natural. But the mutual fund apears to be less risky and, when comparing its historical volatility, Barings Active Short is 12.36 times less risky than Jennison Natural. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Jennison Natural Resources is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,962 in Jennison Natural Resources on October 18, 2024 and sell it today you would earn a total of 211.00 from holding Jennison Natural Resources or generate 5.33% 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. Jennison Natural Resources
Performance |
| Timeline |
| Barings Active Short |
| Jennison Natural Res |
Barings Active and Jennison Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Jennison Natural
The main advantage of trading using opposite Barings Active and Jennison Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Jennison 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 Jennison Natural will offset losses from the drop in Jennison Natural's long position.| Barings Active vs. Delaware Limited Term Diversified | Barings Active vs. Jhancock Diversified Macro | Barings Active vs. Manning Napier Diversified | Barings Active vs. Federated Hermes Conservative |
| Jennison Natural vs. Fidelity Flex Servative | Jennison Natural vs. Oakhurst Short Duration | Jennison Natural vs. Barings Active Short | Jennison Natural vs. Alpine Ultra Short |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |