Correlation Between Barings Emerging and Prudential Floating
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Prudential Floating 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 Prudential Floating 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 Prudential Floating Rate, you can compare the effects of market volatilities on Barings Emerging and Prudential Floating 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 Prudential Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Prudential Floating.
Diversification Opportunities for Barings Emerging and Prudential Floating
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and Prudential is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Prudential Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Floating Rate 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 Prudential Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Floating Rate has no effect on the direction of Barings Emerging i.e., Barings Emerging and Prudential Floating go up and down completely randomly.
Pair Corralation between Barings Emerging and Prudential Floating
Assuming the 90 days horizon Barings Emerging is expected to generate 1.73 times less return on investment than Prudential Floating. In addition to that, Barings Emerging is 2.0 times more volatile than Prudential Floating Rate. It trades about 0.05 of its total potential returns per unit of risk. Prudential Floating Rate is currently generating about 0.19 per unit of volatility. If you would invest 857.00 in Prudential Floating Rate on August 25, 2024 and sell it today you would earn a total of 57.00 from holding Prudential Floating Rate or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Barings Emerging Markets vs. Prudential Floating Rate
Performance |
| Timeline |
| Barings Emerging Markets |
| Prudential Floating Rate |
Barings Emerging and Prudential Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Prudential Floating
The main advantage of trading using opposite Barings Emerging and Prudential Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Prudential Floating 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 Prudential Floating will offset losses from the drop in Prudential Floating's long position.| Barings Emerging vs. Jhancock Short Duration | Barings Emerging vs. Maryland Short Term Tax Free | Barings Emerging vs. Locorr Longshort Modities | Barings Emerging vs. Ab Select Longshort |
| Prudential Floating vs. Western Asset Diversified | Prudential Floating vs. Rbc Emerging Markets | Prudential Floating vs. Barings Emerging Markets | Prudential Floating vs. Artisan 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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