Correlation Between Barings Global and Horizon Active
Can any of the company-specific risk be diversified away by investing in both Barings Global and Horizon 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 Global and Horizon Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Horizon Active Income, you can compare the effects of market volatilities on Barings Global and Horizon 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 Global with a short position of Horizon Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Horizon Active.
Diversification Opportunities for Barings Global and Horizon Active
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barings and Horizon is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Horizon Active Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Active Income and Barings Global 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 Global Floating are associated (or correlated) with Horizon Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Active Income has no effect on the direction of Barings Global i.e., Barings Global and Horizon Active go up and down completely randomly.
Pair Corralation between Barings Global and Horizon Active
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.41 times more return on investment than Horizon Active. However, Barings Global Floating is 2.45 times less risky than Horizon Active. It trades about 0.23 of its potential returns per unit of risk. Horizon Active Income is currently generating about 0.03 per unit of risk. If you would invest 864.00 in Barings Global Floating on September 2, 2024 and sell it today you would earn a total of 14.00 from holding Barings Global Floating or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Horizon Active Income
Performance |
| Timeline |
| Barings Global Floating |
| Horizon Active Income |
Barings Global and Horizon Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Horizon Active
The main advantage of trading using opposite Barings Global and Horizon Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Horizon 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 Horizon Active will offset losses from the drop in Horizon Active's long position.| Barings Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
| Horizon Active vs. Harbor Vertible Securities | Horizon Active vs. Absolute Convertible Arbitrage | Horizon Active vs. Rationalpier 88 Convertible | Horizon Active vs. Advent Claymore Convertible |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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