Correlation Between Barings Emerging and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Transamerica Emerging 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 Emerging 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 Emerging Markets, you can compare the effects of market volatilities on Barings Emerging and Transamerica Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Transamerica Emerging.
Diversification Opportunities for Barings Emerging and Transamerica Emerging
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Transamerica is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging 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 Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Barings Emerging i.e., Barings Emerging and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Barings Emerging and Transamerica Emerging
Assuming the 90 days horizon Barings Emerging Markets is expected to generate 0.38 times more return on investment than Transamerica Emerging. However, Barings Emerging Markets is 2.6 times less risky than Transamerica Emerging. It trades about -0.02 of its potential returns per unit of risk. Transamerica Emerging Markets is currently generating about -0.14 per unit of risk. If you would invest 757.00 in Barings Emerging Markets on August 24, 2024 and sell it today you would lose (1.00) from holding Barings Emerging Markets or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Transamerica Emerging Markets
Performance |
| Timeline |
| Barings Emerging Markets |
| Transamerica Emerging |
Barings Emerging and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Transamerica Emerging
The main advantage of trading using opposite Barings Emerging and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Transamerica Emerging 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 Emerging will offset losses from the drop in Transamerica Emerging's long position.| Barings Emerging vs. T Rowe Price | Barings Emerging vs. Artisan High Income | Barings Emerging vs. Versatile Bond Portfolio | Barings Emerging vs. Bbh Intermediate Municipal |
| Transamerica Emerging vs. Artisan High Income | Transamerica Emerging vs. Ab Global Risk | Transamerica Emerging vs. Goldman Sachs High | Transamerica Emerging vs. Ab Global Risk |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |