Correlation Between Barings Active and Energy Services
Can any of the company-specific risk be diversified away by investing in both Barings Active and Energy Services 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 Energy Services 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 Energy Services Fund, you can compare the effects of market volatilities on Barings Active and Energy Services 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 Energy Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Energy Services.
Diversification Opportunities for Barings Active and Energy Services
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Energy is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Energy Services Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Services 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 Energy Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Services has no effect on the direction of Barings Active i.e., Barings Active and Energy Services go up and down completely randomly.
Pair Corralation between Barings Active and Energy Services
Assuming the 90 days horizon Barings Active Short is expected to generate 0.06 times more return on investment than Energy Services. However, Barings Active Short is 15.8 times less risky than Energy Services. It trades about 0.11 of its potential returns per unit of risk. Energy Services Fund is currently generating about -0.18 per unit of risk. If you would invest 924.00 in Barings Active Short on September 12, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Energy Services Fund
Performance |
| Timeline |
| Barings Active Short |
| Energy Services |
Barings Active and Energy Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Energy Services
The main advantage of trading using opposite Barings Active and Energy Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Energy Services 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 Energy Services will offset losses from the drop in Energy Services' long position.| Barings Active vs. SCOR PK | Barings Active vs. Morningstar Unconstrained Allocation | Barings Active vs. Via Renewables | Barings Active vs. Bondbloxx ETF Trust |
| Energy Services vs. Calamos Dynamic Convertible | Energy Services vs. Gabelli Convertible And | Energy Services vs. Virtus Convertible | Energy Services vs. Fidelity Sai Convertible |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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