Correlation Between Barings Active and Huber Capital
Can any of the company-specific risk be diversified away by investing in both Barings Active and Huber Capital 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 Huber Capital 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 Huber Capital Equity, you can compare the effects of market volatilities on Barings Active and Huber Capital 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 Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Huber Capital.
Diversification Opportunities for Barings Active and Huber Capital
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Huber is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Huber Capital Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Equity 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 Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Equity has no effect on the direction of Barings Active i.e., Barings Active and Huber Capital go up and down completely randomly.
Pair Corralation between Barings Active and Huber Capital
Assuming the 90 days horizon Barings Active is expected to generate 2.78 times less return on investment than Huber Capital. But when comparing it to its historical volatility, Barings Active Short is 5.29 times less risky than Huber Capital. It trades about 0.2 of its potential returns per unit of risk. Huber Capital Equity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,545 in Huber Capital Equity on September 2, 2024 and sell it today you would earn a total of 909.00 from holding Huber Capital Equity or generate 35.72% 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. Huber Capital Equity
Performance |
| Timeline |
| Barings Active Short |
| Huber Capital Equity |
Barings Active and Huber Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Huber Capital
The main advantage of trading using opposite Barings Active and Huber Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Huber Capital 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 Huber Capital will offset losses from the drop in Huber Capital's long position.| Barings Active vs. Bbh Intermediate Municipal | Barings Active vs. Alliancebernstein National Municipal | Barings Active vs. Franklin High Yield | Barings Active vs. Nuveen Minnesota Municipal |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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