Correlation Between Barings Emerging and Transamerica Capital
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Transamerica Capital 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 Transamerica Capital 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 Transamerica Capital Growth, you can compare the effects of market volatilities on Barings Emerging and Transamerica Capital 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 Transamerica Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Transamerica Capital.
Diversification Opportunities for Barings Emerging and Transamerica Capital
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barings and Transamerica is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Transamerica Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Capital 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 Transamerica Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Capital has no effect on the direction of Barings Emerging i.e., Barings Emerging and Transamerica Capital go up and down completely randomly.
Pair Corralation between Barings Emerging and Transamerica Capital
Assuming the 90 days horizon Barings Emerging is expected to generate 1.94 times less return on investment than Transamerica Capital. But when comparing it to its historical volatility, Barings Emerging Markets is 4.95 times less risky than Transamerica Capital. It trades about 0.33 of its potential returns per unit of risk. Transamerica Capital Growth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,754 in Transamerica Capital Growth on October 28, 2024 and sell it today you would earn a total of 122.00 from holding Transamerica Capital Growth or generate 3.25% 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. Transamerica Capital Growth
Performance |
| Timeline |
| Barings Emerging Markets |
| Transamerica Capital |
Barings Emerging and Transamerica Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Transamerica Capital
The main advantage of trading using opposite Barings Emerging and Transamerica Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Transamerica Capital 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 Transamerica Capital will offset losses from the drop in Transamerica Capital's long position.| Barings Emerging vs. Alpine Ultra Short | Barings Emerging vs. Lord Abbett Intermediate | Barings Emerging vs. Bbh Intermediate Municipal | Barings Emerging vs. Morningstar Municipal Bond |
| Transamerica Capital vs. Oppenheimer Gold Special | Transamerica Capital vs. Precious Metals And | Transamerica Capital vs. Franklin Gold Precious | Transamerica Capital vs. Wells Fargo Advantage |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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