Correlation Between Barings Global and Equity Growth
Can any of the company-specific risk be diversified away by investing in both Barings Global and Equity Growth 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 Equity Growth 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 Equity Growth Fund, you can compare the effects of market volatilities on Barings Global and Equity Growth 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 Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Equity Growth.
Diversification Opportunities for Barings Global and Equity Growth
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barings and Equity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Equity Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth 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 Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Barings Global i.e., Barings Global and Equity Growth go up and down completely randomly.
Pair Corralation between Barings Global and Equity Growth
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.22 times more return on investment than Equity Growth. However, Barings Global Floating is 4.5 times less risky than Equity Growth. It trades about 0.37 of its potential returns per unit of risk. Equity Growth Fund is currently generating about 0.07 per unit of risk. If you would invest 870.00 in Barings Global Floating on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Barings Global Floating or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Equity Growth Fund
Performance |
| Timeline |
| Barings Global Floating |
| Equity Growth |
Barings Global and Equity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Equity Growth
The main advantage of trading using opposite Barings Global and Equity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Equity Growth 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 Equity Growth will offset losses from the drop in Equity Growth's long position.| Barings Global vs. Janus High Yield Fund | Barings Global vs. Buffalo High Yield | Barings Global vs. Pace High Yield | Barings Global vs. Msift High Yield |
| Equity Growth vs. Ab Global Risk | Equity Growth vs. Ab Global Risk | Equity Growth vs. Legg Mason Global | Equity Growth vs. Barings Global Floating |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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