Correlation Between Barings Emerging and Caldwell Orkin
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Caldwell Orkin 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 Caldwell Orkin 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 Caldwell Orkin Market, you can compare the effects of market volatilities on Barings Emerging and Caldwell Orkin 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 Caldwell Orkin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Caldwell Orkin.
Diversification Opportunities for Barings Emerging and Caldwell Orkin
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barings and Caldwell is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Caldwell Orkin Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldwell Orkin Market 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 Caldwell Orkin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldwell Orkin Market has no effect on the direction of Barings Emerging i.e., Barings Emerging and Caldwell Orkin go up and down completely randomly.
Pair Corralation between Barings Emerging and Caldwell Orkin
Assuming the 90 days horizon Barings Emerging is expected to generate 5.05 times less return on investment than Caldwell Orkin. But when comparing it to its historical volatility, Barings Emerging Markets is 2.6 times less risky than Caldwell Orkin. It trades about 0.09 of its potential returns per unit of risk. Caldwell Orkin Market is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,429 in Caldwell Orkin Market on September 14, 2024 and sell it today you would earn a total of 1,828 from holding Caldwell Orkin Market or generate 53.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Caldwell Orkin Market
Performance |
| Timeline |
| Barings Emerging Markets |
| Caldwell Orkin Market |
Barings Emerging and Caldwell Orkin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Caldwell Orkin
The main advantage of trading using opposite Barings Emerging and Caldwell Orkin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Caldwell Orkin 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 Caldwell Orkin will offset losses from the drop in Caldwell Orkin's long position.| Barings Emerging vs. Clearbridge Energy Mlp | Barings Emerging vs. Dreyfus Natural Resources | Barings Emerging vs. Jennison Natural Resources | Barings Emerging vs. Calvert Global Energy |
| Caldwell Orkin vs. Sp Midcap Index | Caldwell Orkin vs. Kinetics Market Opportunities | Caldwell Orkin vs. Barings Emerging Markets | Caldwell Orkin vs. Pnc Emerging Markets |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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