Correlation Between Barings Active and Capital Growth
Can any of the company-specific risk be diversified away by investing in both Barings Active and Capital Growth 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 Capital Growth 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 Capital Growth Fund, you can compare the effects of market volatilities on Barings Active and Capital Growth 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 Capital Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Capital Growth.
Diversification Opportunities for Barings Active and Capital Growth
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barings and Capital is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Capital Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Growth 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 Capital Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Growth has no effect on the direction of Barings Active i.e., Barings Active and Capital Growth go up and down completely randomly.
Pair Corralation between Barings Active and Capital Growth
Assuming the 90 days horizon Barings Active Short is expected to generate 0.08 times more return on investment than Capital Growth. However, Barings Active Short is 12.35 times less risky than Capital Growth. It trades about 0.14 of its potential returns per unit of risk. Capital Growth Fund is currently generating about -0.11 per unit of risk. If you would invest 915.00 in Barings Active Short on November 8, 2024 and sell it today you would earn a total of 9.00 from holding Barings Active Short or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Capital Growth Fund
Performance |
| Timeline |
| Barings Active Short |
| Capital Growth |
Barings Active and Capital Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Capital Growth
The main advantage of trading using opposite Barings Active and Capital Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Capital Growth 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 Capital Growth will offset losses from the drop in Capital Growth's long position.| Barings Active vs. Aqr Long Short Equity | Barings Active vs. T Rowe Price | Barings Active vs. Barings Emerging Markets | Barings Active vs. Gmo Quality Fund |
| Capital Growth vs. Lord Abbett Diversified | Capital Growth vs. Principal Lifetime Hybrid | Capital Growth vs. Blrc Sgy Mnp | Capital Growth vs. Rbb Fund |
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 CEOs Directory module to screen CEOs from public companies around the world.
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