Correlation Between Barings Emerging and Ab Small
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Ab Small 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 Ab Small 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 Ab Small Cap, you can compare the effects of market volatilities on Barings Emerging and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Ab Small.
Diversification Opportunities for Barings Emerging and Ab Small
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and SCAVX is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Barings Emerging i.e., Barings Emerging and Ab Small go up and down completely randomly.
Pair Corralation between Barings Emerging and Ab Small
Assuming the 90 days horizon Barings Emerging is expected to generate 33.93 times less return on investment than Ab Small. But when comparing it to its historical volatility, Barings Emerging Markets is 5.05 times less risky than Ab Small. It trades about 0.04 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,486 in Ab Small Cap on September 4, 2024 and sell it today you would earn a total of 141.00 from holding Ab Small Cap or generate 9.49% 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. Ab Small Cap
Performance |
| Timeline |
| Barings Emerging Markets |
| Ab Small Cap |
Barings Emerging and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Ab Small
The main advantage of trading using opposite Barings Emerging and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small's long position.| Barings Emerging vs. T Rowe Price | Barings Emerging vs. Volumetric Fund Volumetric | Barings Emerging vs. Rbb Fund | Barings Emerging vs. T Rowe Price |
| Ab Small vs. Black Oak Emerging | Ab Small vs. Commodities Strategy Fund | Ab Small vs. Growth Strategy Fund | Ab Small vs. Barings Emerging Markets |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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