Correlation Between Barings Emerging and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Wells Fargo 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 Wells Fargo 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 Wells Fargo Strategic, you can compare the effects of market volatilities on Barings Emerging and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Wells Fargo.
Diversification Opportunities for Barings Emerging and Wells Fargo
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Wells is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Wells Fargo Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Strategic 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Strategic has no effect on the direction of Barings Emerging i.e., Barings Emerging and Wells Fargo go up and down completely randomly.
Pair Corralation between Barings Emerging and Wells Fargo
Assuming the 90 days horizon Barings Emerging Markets is expected to generate 1.2 times more return on investment than Wells Fargo. However, Barings Emerging is 1.2 times more volatile than Wells Fargo Strategic. It trades about 0.23 of its potential returns per unit of risk. Wells Fargo Strategic is currently generating about 0.03 per unit of risk. If you would invest 747.00 in Barings Emerging Markets on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Barings Emerging Markets or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Wells Fargo Strategic
Performance |
| Timeline |
| Barings Emerging Markets |
| Wells Fargo Strategic |
Barings Emerging and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Wells Fargo
The main advantage of trading using opposite Barings Emerging and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.| Barings Emerging vs. Rbc Emerging Markets | Barings Emerging vs. Templeton Developing Markets | Barings Emerging vs. Locorr Market Trend | Barings Emerging vs. Calvert Developed Market |
| Wells Fargo vs. Angel Oak Ultrashort | Wells Fargo vs. Catholic Responsible Investments | Wells Fargo vs. Calvert Short Duration | Wells Fargo vs. Transam Short Term Bond |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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