Correlation Between Barings Active and Franklin New
Can any of the company-specific risk be diversified away by investing in both Barings Active and Franklin New 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 Franklin New 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 Franklin New York, you can compare the effects of market volatilities on Barings Active and Franklin New 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 Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Franklin New.
Diversification Opportunities for Barings Active and Franklin New
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barings and Franklin is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Barings Active i.e., Barings Active and Franklin New go up and down completely randomly.
Pair Corralation between Barings Active and Franklin New
Assuming the 90 days horizon Barings Active Short is expected to generate 0.61 times more return on investment than Franklin New. However, Barings Active Short is 1.64 times less risky than Franklin New. It trades about 0.17 of its potential returns per unit of risk. Franklin New York is currently generating about 0.06 per unit of risk. If you would invest 799.00 in Barings Active Short on August 30, 2024 and sell it today you would earn a total of 121.00 from holding Barings Active Short or generate 15.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Franklin New York
Performance |
| Timeline |
| Barings Active Short |
| Franklin New York |
Barings Active and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Franklin New
The main advantage of trading using opposite Barings Active and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New's long position.| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
| Franklin New vs. Bbh Intermediate Municipal | Franklin New vs. John Hancock Money | Franklin New vs. Versatile Bond Portfolio | Franklin New vs. Barings Active 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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