Correlation Between Barings Active and Western Asset
Can any of the company-specific risk be diversified away by investing in both Barings Active and Western Asset 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 Western Asset 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 Western Asset Managed, you can compare the effects of market volatilities on Barings Active and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Western Asset.
Diversification Opportunities for Barings Active and Western Asset
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Western is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Managed has no effect on the direction of Barings Active i.e., Barings Active and Western Asset go up and down completely randomly.
Pair Corralation between Barings Active and Western Asset
Assuming the 90 days horizon Barings Active Short is expected to generate 0.56 times more return on investment than Western Asset. However, Barings Active Short is 1.79 times less risky than Western Asset. It trades about 0.22 of its potential returns per unit of risk. Western Asset Managed is currently generating about 0.1 per unit of risk. If you would invest 835.00 in Barings Active Short on September 12, 2024 and sell it today you would earn a total of 91.00 from holding Barings Active Short or generate 10.9% 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. Western Asset Managed
Performance |
| Timeline |
| Barings Active Short |
| Western Asset Managed |
Barings Active and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Western Asset
The main advantage of trading using opposite Barings Active and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Barings Active vs. SCOR PK | Barings Active vs. Morningstar Unconstrained Allocation | Barings Active vs. Via Renewables | Barings Active vs. Bondbloxx ETF Trust |
| Western Asset vs. Pimco Diversified Income | Western Asset vs. Small Cap Stock | Western Asset vs. T Rowe Price | Western Asset vs. Delaware Limited Term Diversified |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |