Correlation Between Barings Active and Ab Small
Can any of the company-specific risk be diversified away by investing in both Barings Active and Ab Small 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 Ab Small 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 Ab Small Cap, you can compare the effects of market volatilities on Barings Active and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Ab Small.
Diversification Opportunities for Barings Active and Ab Small
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barings and SCYVX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Barings Active i.e., Barings Active and Ab Small go up and down completely randomly.
Pair Corralation between Barings Active and Ab Small
Assuming the 90 days horizon Barings Active is expected to generate 21.53 times less return on investment than Ab Small. But when comparing it to its historical volatility, Barings Active Short is 12.12 times less risky than Ab Small. It trades about 0.14 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,516 in Ab Small Cap on August 29, 2024 and sell it today you would earn a total of 138.00 from holding Ab Small Cap or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Barings Active Short vs. Ab Small Cap
Performance |
| Timeline |
| Barings Active Short |
| Ab Small Cap |
Barings Active and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Ab Small
The main advantage of trading using opposite Barings Active and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small'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 |
| Ab Small vs. Absolute Convertible Arbitrage | Ab Small vs. Gabelli Convertible And | Ab Small vs. Fidelity Sai Convertible | Ab Small vs. Advent Claymore 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |