Correlation Between Barings Active and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Barings Active and Transamerica Emerging 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 Transamerica Emerging 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 Transamerica Emerging Markets, you can compare the effects of market volatilities on Barings Active and Transamerica Emerging 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 Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Transamerica Emerging.
Diversification Opportunities for Barings Active and Transamerica Emerging
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Transamerica is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging 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 Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Barings Active i.e., Barings Active and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Barings Active and Transamerica Emerging
Assuming the 90 days horizon Barings Active is expected to generate 1.32 times less return on investment than Transamerica Emerging. But when comparing it to its historical volatility, Barings Active Short is 6.3 times less risky than Transamerica Emerging. It trades about 0.25 of its potential returns per unit of risk. Transamerica Emerging Markets is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 716.00 in Transamerica Emerging Markets on September 1, 2024 and sell it today you would earn a total of 85.00 from holding Transamerica Emerging Markets or generate 11.87% 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. Transamerica Emerging Markets
Performance |
| Timeline |
| Barings Active Short |
| Transamerica Emerging |
Barings Active and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Transamerica Emerging
The main advantage of trading using opposite Barings Active and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Transamerica Emerging 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging's long position.| Barings Active vs. Ab Bond Inflation | Barings Active vs. Western Asset Inflation | Barings Active vs. Blackrock Inflation Protected | Barings Active vs. Aqr Managed Futures |
| Transamerica Emerging vs. Transamerica Capital Growth | Transamerica Emerging vs. Transamerica Growth T | Transamerica Emerging vs. Transamerica Large Cap | Transamerica Emerging vs. Transamerica Large Cap |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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