Correlation Between Barings Emerging and Plumb Balanced
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Plumb Balanced 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 Plumb Balanced 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 Plumb Balanced, you can compare the effects of market volatilities on Barings Emerging and Plumb Balanced 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 Plumb Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Plumb Balanced.
Diversification Opportunities for Barings Emerging and Plumb Balanced
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and Plumb is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Plumb Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plumb Balanced 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 Plumb Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plumb Balanced has no effect on the direction of Barings Emerging i.e., Barings Emerging and Plumb Balanced go up and down completely randomly.
Pair Corralation between Barings Emerging and Plumb Balanced
Assuming the 90 days horizon Barings Emerging is expected to generate 8.38 times less return on investment than Plumb Balanced. But when comparing it to its historical volatility, Barings Emerging Markets is 2.03 times less risky than Plumb Balanced. It trades about 0.08 of its potential returns per unit of risk. Plumb Balanced is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 3,923 in Plumb Balanced on September 2, 2024 and sell it today you would earn a total of 179.00 from holding Plumb Balanced or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Plumb Balanced
Performance |
| Timeline |
| Barings Emerging Markets |
| Plumb Balanced |
Barings Emerging and Plumb Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Plumb Balanced
The main advantage of trading using opposite Barings Emerging and Plumb Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Plumb Balanced 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 Plumb Balanced will offset losses from the drop in Plumb Balanced's long position.| Barings Emerging vs. Vy Goldman Sachs | Barings Emerging vs. Oppenheimer Gold Special | Barings Emerging vs. Gabelli Gold Fund | Barings Emerging vs. James Balanced Golden |
| Plumb Balanced vs. Value Line Asset | Plumb Balanced vs. Sit Balanced Fund | Plumb Balanced vs. Performance Trust Strategic | Plumb Balanced vs. Columbia Balanced 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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