Correlation Between Barings Emerging and Rational Special
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Rational Special 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 Rational Special 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 Rational Special Situations, you can compare the effects of market volatilities on Barings Emerging and Rational Special 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 Rational Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Rational Special.
Diversification Opportunities for Barings Emerging and Rational Special
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and Rational is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Rational Special Situations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rational Special Sit 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 Rational Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rational Special Sit has no effect on the direction of Barings Emerging i.e., Barings Emerging and Rational Special go up and down completely randomly.
Pair Corralation between Barings Emerging and Rational Special
Assuming the 90 days horizon Barings Emerging Markets is expected to generate 3.36 times more return on investment than Rational Special. However, Barings Emerging is 3.36 times more volatile than Rational Special Situations. It trades about 0.12 of its potential returns per unit of risk. Rational Special Situations is currently generating about 0.28 per unit of risk. If you would invest 663.00 in Barings Emerging Markets on August 29, 2024 and sell it today you would earn a total of 94.00 from holding Barings Emerging Markets or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Rational Special Situations
Performance |
| Timeline |
| Barings Emerging Markets |
| Rational Special Sit |
Barings Emerging and Rational Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Rational Special
The main advantage of trading using opposite Barings Emerging and Rational Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Rational Special 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 Rational Special will offset losses from the drop in Rational Special's long position.| Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. HUMANA INC | Barings Emerging vs. Aquagold International | Barings Emerging vs. Barloworld Ltd ADR |
| Rational Special vs. Ms Global Fixed | Rational Special vs. Ab Global Risk | Rational Special vs. Commonwealth Global Fund | Rational Special vs. Blue Current Global |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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