Correlation Between Barings Emerging and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Pacific Funds 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 Pacific Funds 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 Pacific Funds Strategic, you can compare the effects of market volatilities on Barings Emerging and Pacific Funds 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 Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Pacific Funds.
Diversification Opportunities for Barings Emerging and Pacific Funds
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Pacific is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Pacific Funds Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Strategic 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Strategic has no effect on the direction of Barings Emerging i.e., Barings Emerging and Pacific Funds go up and down completely randomly.
Pair Corralation between Barings Emerging and Pacific Funds
Assuming the 90 days horizon Barings Emerging is expected to generate 1.32 times less return on investment than Pacific Funds. In addition to that, Barings Emerging is 1.62 times more volatile than Pacific Funds Strategic. It trades about 0.06 of its total potential returns per unit of risk. Pacific Funds Strategic is currently generating about 0.14 per unit of volatility. If you would invest 936.00 in Pacific Funds Strategic on September 2, 2024 and sell it today you would earn a total of 120.00 from holding Pacific Funds Strategic or generate 12.82% 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. Pacific Funds Strategic
Performance |
| Timeline |
| Barings Emerging Markets |
| Pacific Funds Strategic |
Barings Emerging and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Pacific Funds
The main advantage of trading using opposite Barings Emerging and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' 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 |
| Pacific Funds vs. Pacific Funds Floating | Pacific Funds vs. Pacific Funds High | Pacific Funds vs. Pacific Funds Short | Pacific Funds vs. Pacific Funds Short |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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