Correlation Between Barings Active and Real Estate
Can any of the company-specific risk be diversified away by investing in both Barings Active and Real Estate 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 Real Estate 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 Real Estate Securities, you can compare the effects of market volatilities on Barings Active and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Real Estate.
Diversification Opportunities for Barings Active and Real Estate
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and Real is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Real Estate Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Securities 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Securities has no effect on the direction of Barings Active i.e., Barings Active and Real Estate go up and down completely randomly.
Pair Corralation between Barings Active and Real Estate
Assuming the 90 days horizon Barings Active is expected to generate 2.44 times less return on investment than Real Estate. But when comparing it to its historical volatility, Barings Active Short is 7.18 times less risky than Real Estate. It trades about 0.18 of its potential returns per unit of risk. Real Estate Securities is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,987 in Real Estate Securities on August 31, 2024 and sell it today you would earn a total of 37.00 from holding Real Estate Securities or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Real Estate Securities
Performance |
| Timeline |
| Barings Active Short |
| Real Estate Securities |
Barings Active and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Real Estate
The main advantage of trading using opposite Barings Active and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| Barings Active vs. Blrc Sgy Mnp | Barings Active vs. Ab Impact Municipal | Barings Active vs. Artisan High Income | Barings Active vs. Maryland Tax Free Bond |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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