Correlation Between Barings Active and Deutsche Health
Can any of the company-specific risk be diversified away by investing in both Barings Active and Deutsche Health 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 Deutsche Health 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 Deutsche Health And, you can compare the effects of market volatilities on Barings Active and Deutsche Health 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 Deutsche Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Deutsche Health.
Diversification Opportunities for Barings Active and Deutsche Health
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Deutsche is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Deutsche Health And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Health And 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 Deutsche Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Health And has no effect on the direction of Barings Active i.e., Barings Active and Deutsche Health go up and down completely randomly.
Pair Corralation between Barings Active and Deutsche Health
Assuming the 90 days horizon Barings Active is expected to generate 1.27 times less return on investment than Deutsche Health. But when comparing it to its historical volatility, Barings Active Short is 4.36 times less risky than Deutsche Health. It trades about 0.16 of its potential returns per unit of risk. Deutsche Health And is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,720 in Deutsche Health And on November 27, 2024 and sell it today you would earn a total of 611.00 from holding Deutsche Health And or generate 16.42% 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. Deutsche Health And
Performance |
| Timeline |
| Barings Active Short |
| Deutsche Health And |
Barings Active and Deutsche Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Deutsche Health
The main advantage of trading using opposite Barings Active and Deutsche Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Deutsche Health 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 Deutsche Health will offset losses from the drop in Deutsche Health's long position.| Barings Active vs. Glg Intl Small | Barings Active vs. Versatile Bond Portfolio | Barings Active vs. Tfa Alphagen Growth | Barings Active vs. Rbb Fund |
| Deutsche Health vs. Siit High Yield | Deutsche Health vs. Metropolitan West High | Deutsche Health vs. Access Flex High | Deutsche Health vs. Aqr Alternative Risk |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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