Correlation Between Barings Emerging and Barings Global
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Barings Global 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 Global 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 Global Floating, you can compare the effects of market volatilities on Barings Emerging and Barings Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Barings Global.
Diversification Opportunities for Barings Emerging and Barings Global
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and Barings is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Floating has no effect on the direction of Barings Emerging i.e., Barings Emerging and Barings Global go up and down completely randomly.
Pair Corralation between Barings Emerging and Barings Global
Assuming the 90 days horizon Barings Emerging is expected to generate 3.01 times less return on investment than Barings Global. In addition to that, Barings Emerging is 3.22 times more volatile than Barings Global Floating. It trades about 0.03 of its total potential returns per unit of risk. Barings Global Floating is currently generating about 0.34 per unit of volatility. If you would invest 871.00 in Barings Global Floating on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Barings Global Floating or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Barings Emerging Markets vs. Barings Global Floating
Performance |
| Timeline |
| Barings Emerging Markets |
| Barings Global Floating |
Barings Emerging and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Barings Global
The main advantage of trading using opposite Barings Emerging and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Barings Global 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 Global will offset losses from the drop in Barings Global's long position.| Barings Emerging vs. Victory Floating Rate | Barings Emerging vs. Blackrock High Income | Barings Emerging vs. Blk Rk Sg | Barings Emerging vs. Amg Renaissance Large |
| Barings Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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