Correlation Between Barings Emerging and Barings Active
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Barings Active 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 Barings Active 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 Barings Active Short, you can compare the effects of market volatilities on Barings Emerging and Barings Active 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 Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Barings Active.
Diversification Opportunities for Barings Emerging and Barings Active
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Barings is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short 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 Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Barings Emerging i.e., Barings Emerging and Barings Active go up and down completely randomly.
Pair Corralation between Barings Emerging and Barings Active
Assuming the 90 days horizon Barings Emerging Markets is expected to generate 2.43 times more return on investment than Barings Active. However, Barings Emerging is 2.43 times more volatile than Barings Active Short. It trades about 0.08 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.16 per unit of risk. If you would invest 657.00 in Barings Emerging Markets on August 27, 2024 and sell it today you would earn a total of 101.00 from holding Barings Emerging Markets or generate 15.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Barings Active Short
Performance |
| Timeline |
| Barings Emerging Markets |
| Barings Active Short |
Barings Emerging and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Barings Active
The main advantage of trading using opposite Barings Emerging and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Barings Active 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 Barings Active will offset losses from the drop in Barings Active's long position.| Barings Emerging vs. Morningstar Municipal Bond | Barings Emerging vs. Bbh Intermediate Municipal | Barings Emerging vs. Baird Strategic Municipal | Barings Emerging vs. Dws Government Money |
| Barings Active vs. Versatile Bond Portfolio | Barings Active vs. Nuveen Minnesota Municipal | Barings Active vs. Ishares Municipal Bond | Barings Active vs. Multisector Bond Sma |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |