Correlation Between Barings Emerging and Deutsche Gold
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Deutsche Gold 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 Deutsche Gold 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 Deutsche Gold Precious, you can compare the effects of market volatilities on Barings Emerging and Deutsche Gold 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 Deutsche Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Deutsche Gold.
Diversification Opportunities for Barings Emerging and Deutsche Gold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Deutsche is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Deutsche Gold Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Gold Precious 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 Deutsche Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Gold Precious has no effect on the direction of Barings Emerging i.e., Barings Emerging and Deutsche Gold go up and down completely randomly.
Pair Corralation between Barings Emerging and Deutsche Gold
Assuming the 90 days horizon Barings Emerging is expected to generate 7.44 times less return on investment than Deutsche Gold. But when comparing it to its historical volatility, Barings Emerging Markets is 5.19 times less risky than Deutsche Gold. It trades about 0.23 of its potential returns per unit of risk. Deutsche Gold Precious is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 5,363 in Deutsche Gold Precious on November 5, 2024 and sell it today you would earn a total of 491.00 from holding Deutsche Gold Precious or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Deutsche Gold Precious
Performance |
| Timeline |
| Barings Emerging Markets |
| Deutsche Gold Precious |
Barings Emerging and Deutsche Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Deutsche Gold
The main advantage of trading using opposite Barings Emerging and Deutsche Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Deutsche Gold 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 Deutsche Gold will offset losses from the drop in Deutsche Gold's long position.| Barings Emerging vs. Allianzgi Diversified Income | Barings Emerging vs. Fulcrum Diversified Absolute | Barings Emerging vs. Jhancock Diversified Macro | Barings Emerging vs. Jpmorgan Diversified Fund |
| Deutsche Gold vs. John Hancock Financial | Deutsche Gold vs. Prudential Financial Services | Deutsche Gold vs. Mesirow Financial Small | Deutsche Gold vs. Angel Oak Financial |
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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