Correlation Between Barings Emerging and Asset Allocation
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Asset Allocation 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 Asset Allocation 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 Asset Allocation Fund, you can compare the effects of market volatilities on Barings Emerging and Asset Allocation 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 Asset Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Asset Allocation.
Diversification Opportunities for Barings Emerging and Asset Allocation
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barings and Asset is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Asset Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asset Allocation 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 Asset Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asset Allocation has no effect on the direction of Barings Emerging i.e., Barings Emerging and Asset Allocation go up and down completely randomly.
Pair Corralation between Barings Emerging and Asset Allocation
Assuming the 90 days horizon Barings Emerging is expected to generate 2.76 times less return on investment than Asset Allocation. But when comparing it to its historical volatility, Barings Emerging Markets is 1.4 times less risky than Asset Allocation. It trades about 0.06 of its potential returns per unit of risk. Asset Allocation Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 979.00 in Asset Allocation Fund on September 2, 2024 and sell it today you would earn a total of 277.00 from holding Asset Allocation Fund or generate 28.29% 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. Asset Allocation Fund
Performance |
Timeline |
Barings Emerging Markets |
Asset Allocation |
Barings Emerging and Asset Allocation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barings Emerging and Asset Allocation
The main advantage of trading using opposite Barings Emerging and Asset Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Asset Allocation 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 Asset Allocation will offset losses from the drop in Asset Allocation's long position.Barings Emerging vs. Vy Goldman Sachs | Barings Emerging vs. Oppenheimer Gold Special | Barings Emerging vs. Gabelli Gold Fund | Barings Emerging vs. James Balanced Golden |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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