Correlation Between Barings Active and Growth Income
Can any of the company-specific risk be diversified away by investing in both Barings Active and Growth Income 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 Growth Income 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 Growth Income Fund, you can compare the effects of market volatilities on Barings Active and Growth Income 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 Growth Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Growth Income.
Diversification Opportunities for Barings Active and Growth Income
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Growth is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Growth Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Income 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 Growth Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Income has no effect on the direction of Barings Active i.e., Barings Active and Growth Income go up and down completely randomly.
Pair Corralation between Barings Active and Growth Income
Assuming the 90 days horizon Barings Active is expected to generate 16.23 times less return on investment than Growth Income. But when comparing it to its historical volatility, Barings Active Short is 6.74 times less risky than Growth Income. It trades about 0.08 of its potential returns per unit of risk. Growth Income Fund is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,348 in Growth Income Fund on August 27, 2024 and sell it today you would earn a total of 118.00 from holding Growth Income Fund or generate 3.52% 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. Growth Income Fund
Performance |
| Timeline |
| Barings Active Short |
| Growth Income |
Barings Active and Growth Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Growth Income
The main advantage of trading using opposite Barings Active and Growth Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Growth Income 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 Growth Income will offset losses from the drop in Growth Income's long position.| Barings Active vs. Versatile Bond Portfolio | Barings Active vs. Nuveen Minnesota Municipal | Barings Active vs. Ishares Municipal Bond | Barings Active vs. Multisector Bond Sma |
| Growth Income vs. Counterpoint Tactical Municipal | Growth Income vs. Baird Strategic Municipal | Growth Income vs. Ishares Municipal Bond | Growth Income vs. Bbh Intermediate Municipal |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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