Correlation Between Barings Emerging and Guidepath(r) Flexible
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Guidepath(r) Flexible 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 Guidepath(r) Flexible 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 Guidepath Flexible Income, you can compare the effects of market volatilities on Barings Emerging and Guidepath(r) Flexible 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 Guidepath(r) Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Guidepath(r) Flexible.
Diversification Opportunities for Barings Emerging and Guidepath(r) Flexible
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Guidepath(r) is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Guidepath Flexible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Flexible Income 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 Guidepath(r) Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Flexible Income has no effect on the direction of Barings Emerging i.e., Barings Emerging and Guidepath(r) Flexible go up and down completely randomly.
Pair Corralation between Barings Emerging and Guidepath(r) Flexible
Assuming the 90 days horizon Barings Emerging Markets is expected to generate 1.45 times more return on investment than Guidepath(r) Flexible. However, Barings Emerging is 1.45 times more volatile than Guidepath Flexible Income. It trades about 0.25 of its potential returns per unit of risk. Guidepath Flexible Income is currently generating about 0.27 per unit of risk. If you would invest 746.00 in Barings Emerging Markets on November 3, 2024 and sell it today you would earn a total of 10.00 from holding Barings Emerging Markets or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Guidepath Flexible Income
Performance |
| Timeline |
| Barings Emerging Markets |
| Guidepath Flexible Income |
Barings Emerging and Guidepath(r) Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Guidepath(r) Flexible
The main advantage of trading using opposite Barings Emerging and Guidepath(r) Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Guidepath(r) Flexible 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 Guidepath(r) Flexible will offset losses from the drop in Guidepath(r) Flexible's long position.| Barings Emerging vs. Blackstone Secured Lending | Barings Emerging vs. Angel Oak Financial | Barings Emerging vs. Fidelity Advisor Financial | Barings Emerging vs. Goldman Sachs Financial |
| Guidepath(r) Flexible vs. Old Westbury California | Guidepath(r) Flexible vs. Morningstar Defensive Bond | Guidepath(r) Flexible vs. Rbc Bluebay Emerging | Guidepath(r) Flexible vs. Versatile Bond Portfolio |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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