Correlation Between Barings Active and Thornburg Limited
Can any of the company-specific risk be diversified away by investing in both Barings Active and Thornburg Limited 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 Thornburg Limited 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 Thornburg Limited Term, you can compare the effects of market volatilities on Barings Active and Thornburg Limited 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 Thornburg Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Thornburg Limited.
Diversification Opportunities for Barings Active and Thornburg Limited
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barings and Thornburg is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Thornburg Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Limited Term 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 Thornburg Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Limited Term has no effect on the direction of Barings Active i.e., Barings Active and Thornburg Limited go up and down completely randomly.
Pair Corralation between Barings Active and Thornburg Limited
Assuming the 90 days horizon Barings Active Short is expected to generate 0.69 times more return on investment than Thornburg Limited. However, Barings Active Short is 1.46 times less risky than Thornburg Limited. It trades about 0.17 of its potential returns per unit of risk. Thornburg Limited Term is currently generating about 0.1 per unit of risk. If you would invest 811.00 in Barings Active Short on September 14, 2024 and sell it today you would earn a total of 115.00 from holding Barings Active Short or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Thornburg Limited Term
Performance |
| Timeline |
| Barings Active Short |
| Thornburg Limited Term |
Barings Active and Thornburg Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Thornburg Limited
The main advantage of trading using opposite Barings Active and Thornburg Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Thornburg Limited 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 Thornburg Limited will offset losses from the drop in Thornburg Limited's long position.| Barings Active vs. Champlain Small | Barings Active vs. Franklin Small Cap | Barings Active vs. Touchstone Small Cap | Barings Active vs. Df Dent Small |
| Thornburg Limited vs. Easterly Snow Longshort | Thornburg Limited vs. Barings Active Short | Thornburg Limited vs. Quantitative Longshort Equity | Thornburg Limited vs. Siit Ultra Short |
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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