Correlation Between Barings Emerging and Barings Us
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Barings Us 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 Barings Us 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 Barings High Yield, you can compare the effects of market volatilities on Barings Emerging and Barings Us 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 Barings Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Barings Us.
Diversification Opportunities for Barings Emerging and Barings Us
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Barings is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Barings High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings High Yield 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 Barings Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings High Yield has no effect on the direction of Barings Emerging i.e., Barings Emerging and Barings Us go up and down completely randomly.
Pair Corralation between Barings Emerging and Barings Us
Assuming the 90 days horizon Barings Emerging is expected to generate 1.44 times less return on investment than Barings Us. In addition to that, Barings Emerging is 1.29 times more volatile than Barings High Yield. It trades about 0.07 of its total potential returns per unit of risk. Barings High Yield is currently generating about 0.13 per unit of volatility. If you would invest 681.00 in Barings High Yield on August 27, 2024 and sell it today you would earn a total of 136.00 from holding Barings High Yield or generate 19.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Barings High Yield
Performance |
| Timeline |
| Barings Emerging Markets |
| Barings High Yield |
Barings Emerging and Barings Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Barings Us
The main advantage of trading using opposite Barings Emerging and Barings Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Barings Us 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 Barings Us will offset losses from the drop in Barings Us' long position.| Barings Emerging vs. Delaware Limited Term Diversified | Barings Emerging vs. Tiaa Cref Lifestyle Conservative | Barings Emerging vs. Oaktree Diversifiedome | Barings Emerging vs. Pimco Diversified Income |
| Barings Us vs. Barings Active Short | Barings Us vs. Barings Emerging Markets | Barings Us vs. Barings Emerging Markets | Barings Us 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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