Correlation Between Barings Emerging and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Nebraska Municipal 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 Nebraska Municipal 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 Nebraska Municipal Fund, you can compare the effects of market volatilities on Barings Emerging and Nebraska Municipal 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 Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Nebraska Municipal.
Diversification Opportunities for Barings Emerging and Nebraska Municipal
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Nebraska is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal 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 Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Barings Emerging i.e., Barings Emerging and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Barings Emerging and Nebraska Municipal
Assuming the 90 days horizon Barings Emerging is expected to generate 3.08 times less return on investment than Nebraska Municipal. In addition to that, Barings Emerging is 1.36 times more volatile than Nebraska Municipal Fund. It trades about 0.09 of its total potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.4 per unit of volatility. If you would invest 932.00 in Nebraska Municipal Fund on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Nebraska Municipal Fund or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Barings Emerging Markets vs. Nebraska Municipal Fund
Performance |
| Timeline |
| Barings Emerging Markets |
| Nebraska Municipal |
Barings Emerging and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Nebraska Municipal
The main advantage of trading using opposite Barings Emerging and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Nebraska Municipal 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal'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 |
| Nebraska Municipal vs. Viking Tax Free Fund | Nebraska Municipal vs. Integrity Dividend Summit | Nebraska Municipal vs. Integrity Dividend Summit | Nebraska Municipal vs. Nebraska Municipal Fund |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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