Correlation Between Barings Emerging and Dfa Intermediate
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Dfa Intermediate 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 Dfa Intermediate 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 Dfa Intermediate Term, you can compare the effects of market volatilities on Barings Emerging and Dfa Intermediate 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 Dfa Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Dfa Intermediate.
Diversification Opportunities for Barings Emerging and Dfa Intermediate
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Dfa is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Dfa Intermediate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Intermediate Term 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 Dfa Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Intermediate Term has no effect on the direction of Barings Emerging i.e., Barings Emerging and Dfa Intermediate go up and down completely randomly.
Pair Corralation between Barings Emerging and Dfa Intermediate
Assuming the 90 days horizon Barings Emerging Markets is expected to generate 2.96 times more return on investment than Dfa Intermediate. However, Barings Emerging is 2.96 times more volatile than Dfa Intermediate Term. It trades about 0.04 of its potential returns per unit of risk. Dfa Intermediate Term is currently generating about 0.06 per unit of risk. If you would invest 733.00 in Barings Emerging Markets on September 14, 2024 and sell it today you would earn a total of 26.00 from holding Barings Emerging Markets or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Dfa Intermediate Term
Performance |
| Timeline |
| Barings Emerging Markets |
| Dfa Intermediate Term |
Barings Emerging and Dfa Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Dfa Intermediate
The main advantage of trading using opposite Barings Emerging and Dfa Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Dfa Intermediate 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 Dfa Intermediate will offset losses from the drop in Dfa Intermediate'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 |
| Dfa Intermediate vs. Intal High Relative | Dfa Intermediate vs. Dfa International | Dfa Intermediate vs. Dfa Inflation Protected | Dfa Intermediate vs. Dfa International Small |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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