Correlation Between Barings Emerging and Allianzgi Global
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Allianzgi Global 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 Emerging and Allianzgi Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Allianzgi Global Water, you can compare the effects of market volatilities on Barings Emerging and Allianzgi Global 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 Emerging with a short position of Allianzgi Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Allianzgi Global.
Diversification Opportunities for Barings Emerging and Allianzgi Global
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Allianzgi is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Allianzgi Global Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Global Water and Barings Emerging 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 Emerging Markets are associated (or correlated) with Allianzgi Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Global Water has no effect on the direction of Barings Emerging i.e., Barings Emerging and Allianzgi Global go up and down completely randomly.
Pair Corralation between Barings Emerging and Allianzgi Global
Assuming the 90 days horizon Barings Emerging is expected to generate 2.05 times less return on investment than Allianzgi Global. But when comparing it to its historical volatility, Barings Emerging Markets is 2.37 times less risky than Allianzgi Global. It trades about 0.12 of its potential returns per unit of risk. Allianzgi Global Water is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,758 in Allianzgi Global Water on September 1, 2024 and sell it today you would earn a total of 440.00 from holding Allianzgi Global Water or generate 25.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Barings Emerging Markets vs. Allianzgi Global Water
Performance |
| Timeline |
| Barings Emerging Markets |
| Allianzgi Global Water |
Barings Emerging and Allianzgi Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Allianzgi Global
The main advantage of trading using opposite Barings Emerging and Allianzgi Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Allianzgi Global 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 Allianzgi Global will offset losses from the drop in Allianzgi Global's long position.| Barings Emerging vs. Barings Active Short | Barings Emerging vs. Barings Emerging Markets | Barings Emerging vs. Barings Active Short | Barings Emerging vs. Barings Global Floating |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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