Correlation Between Barings Active and Inverse High
Can any of the company-specific risk be diversified away by investing in both Barings Active and Inverse High 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 Inverse High 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 Inverse High Yield, you can compare the effects of market volatilities on Barings Active and Inverse High 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 Inverse High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Inverse High.
Diversification Opportunities for Barings Active and Inverse High
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and Inverse is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Inverse High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse High Yield 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 Inverse High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse High Yield has no effect on the direction of Barings Active i.e., Barings Active and Inverse High go up and down completely randomly.
Pair Corralation between Barings Active and Inverse High
Assuming the 90 days horizon Barings Active Short is expected to generate 0.2 times more return on investment than Inverse High. However, Barings Active Short is 5.12 times less risky than Inverse High. It trades about 0.14 of its potential returns per unit of risk. Inverse High Yield is currently generating about -0.07 per unit of risk. If you would invest 925.00 in Barings Active Short on November 7, 2024 and sell it today you would earn a total of 2.00 from holding Barings Active Short or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Barings Active Short vs. Inverse High Yield
Performance |
| Timeline |
| Barings Active Short |
| Inverse High Yield |
Barings Active and Inverse High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Inverse High
The main advantage of trading using opposite Barings Active and Inverse High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Inverse High 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 Inverse High will offset losses from the drop in Inverse High's long position.| Barings Active vs. Artisan Developing World | Barings Active vs. Eagle Mlp Strategy | Barings Active vs. Growth Strategy Fund | Barings Active vs. Doubleline Emerging Markets |
| Inverse High vs. Investec Emerging Markets | Inverse High vs. Artisan Developing World | Inverse High vs. Nasdaq 100 2x Strategy | Inverse High vs. Eagle Mlp Strategy |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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