Correlation Between Barings Active and Transamerica International
Can any of the company-specific risk be diversified away by investing in both Barings Active and Transamerica International 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 International 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 International Stock, you can compare the effects of market volatilities on Barings Active and Transamerica International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Transamerica International.
Diversification Opportunities for Barings Active and Transamerica International
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barings and Transamerica is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Transamerica International Sto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica International has no effect on the direction of Barings Active i.e., Barings Active and Transamerica International go up and down completely randomly.
Pair Corralation between Barings Active and Transamerica International
Assuming the 90 days horizon Barings Active Short is expected to generate 0.11 times more return on investment than Transamerica International. However, Barings Active Short is 9.07 times less risky than Transamerica International. It trades about -0.07 of its potential returns per unit of risk. Transamerica International Stock is currently generating about -0.1 per unit of risk. If you would invest 924.00 in Barings Active Short on September 25, 2024 and sell it today you would lose (1.00) from holding Barings Active Short or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Transamerica International Sto
Performance |
| Timeline |
| Barings Active Short |
| Transamerica International |
Barings Active and Transamerica International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Transamerica International
The main advantage of trading using opposite Barings Active and Transamerica International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Transamerica International 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 International will offset losses from the drop in Transamerica International's long position.| Barings Active vs. The Gabelli Healthcare | Barings Active vs. Alphacentric Lifesci Healthcare | Barings Active vs. Lord Abbett Health | Barings Active vs. Vanguard Health Care |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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