Correlation Between Barings Emerging and Swan Defined
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Swan Defined 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 Swan Defined 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 Swan Defined Risk, you can compare the effects of market volatilities on Barings Emerging and Swan Defined 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 Swan Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Swan Defined.
Diversification Opportunities for Barings Emerging and Swan Defined
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Swan is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of Barings Emerging i.e., Barings Emerging and Swan Defined go up and down completely randomly.
Pair Corralation between Barings Emerging and Swan Defined
Assuming the 90 days horizon Barings Emerging is expected to generate 4.14 times less return on investment than Swan Defined. But when comparing it to its historical volatility, Barings Emerging Markets is 3.36 times less risky than Swan Defined. It trades about 0.04 of its potential returns per unit of risk. Swan Defined Risk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,393 in Swan Defined Risk on September 14, 2024 and sell it today you would earn a total of 200.00 from holding Swan Defined Risk or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Swan Defined Risk
Performance |
| Timeline |
| Barings Emerging Markets |
| Swan Defined Risk |
Barings Emerging and Swan Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Swan Defined
The main advantage of trading using opposite Barings Emerging and Swan Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Swan Defined 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 Swan Defined will offset losses from the drop in Swan Defined'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 |
| Swan Defined vs. Dunham Real Estate | Swan Defined vs. Simt Real Estate | Swan Defined vs. Redwood Real Estate | Swan Defined vs. Neuberger Berman Real |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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