Correlation Between Barings Emerging and Versus Capital
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Versus 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 Versus 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 Versus Capital Multi Manager, you can compare the effects of market volatilities on Barings Emerging and Versus 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 Versus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Versus Capital.
Diversification Opportunities for Barings Emerging and Versus Capital
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Versus is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Versus Capital Multi Manager in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Versus Capital Multi 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 Versus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Versus Capital Multi has no effect on the direction of Barings Emerging i.e., Barings Emerging and Versus Capital go up and down completely randomly.
Pair Corralation between Barings Emerging and Versus Capital
Assuming the 90 days horizon Barings Emerging Markets is expected to generate 2.34 times more return on investment than Versus Capital. However, Barings Emerging is 2.34 times more volatile than Versus Capital Multi Manager. It trades about 0.08 of its potential returns per unit of risk. Versus Capital Multi Manager is currently generating about 0.15 per unit of risk. If you would invest 735.00 in Barings Emerging Markets on September 3, 2024 and sell it today you would earn a total of 24.00 from holding Barings Emerging Markets or generate 3.27% 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. Versus Capital Multi Manager
Performance |
| Timeline |
| Barings Emerging Markets |
| Versus Capital Multi |
Barings Emerging and Versus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Versus Capital
The main advantage of trading using opposite Barings Emerging and Versus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Versus 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 Versus Capital will offset losses from the drop in Versus Capital's long position.| Barings Emerging vs. Ab Small Cap | Barings Emerging vs. Ab Small Cap | Barings Emerging vs. Oklahoma College Savings | Barings Emerging vs. Champlain Small |
| Versus Capital vs. Vanguard Total Stock | Versus Capital vs. Vanguard 500 Index | Versus Capital vs. Vanguard Total Stock | Versus Capital vs. Vanguard Total Stock |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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