Correlation Between Barings Global and Absolute Convertible
Can any of the company-specific risk be diversified away by investing in both Barings Global and Absolute Convertible 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 Absolute Convertible 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 Absolute Convertible Arbitrage, you can compare the effects of market volatilities on Barings Global and Absolute Convertible 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 Absolute Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Absolute Convertible.
Diversification Opportunities for Barings Global and Absolute Convertible
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Absolute is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Absolute Convertible Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Convertible 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 Absolute Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Convertible has no effect on the direction of Barings Global i.e., Barings Global and Absolute Convertible go up and down completely randomly.
Pair Corralation between Barings Global and Absolute Convertible
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.65 times more return on investment than Absolute Convertible. However, Barings Global Floating is 1.54 times less risky than Absolute Convertible. It trades about 0.09 of its potential returns per unit of risk. Absolute Convertible Arbitrage is currently generating about -0.05 per unit of risk. If you would invest 872.00 in Barings Global Floating on October 30, 2024 and sell it today you would earn a total of 4.00 from holding Barings Global Floating or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Absolute Convertible Arbitrage
Performance |
| Timeline |
| Barings Global Floating |
| Absolute Convertible |
Barings Global and Absolute Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Absolute Convertible
The main advantage of trading using opposite Barings Global and Absolute Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Absolute Convertible 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 Absolute Convertible will offset losses from the drop in Absolute Convertible's long position.| Barings Global vs. First Eagle Gold | Barings Global vs. Global Gold Fund | Barings Global vs. The Gold Bullion | Barings Global vs. Oppenheimer Gold Special |
| Absolute Convertible vs. Morgan Stanley Emerging | Absolute Convertible vs. Artisan Developing World | Absolute Convertible vs. Eagle Mlp Strategy | Absolute Convertible vs. Transamerica Emerging Markets |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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