Correlation Between Barings Global and Ab Global
Can any of the company-specific risk be diversified away by investing in both Barings Global and Ab 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 Global and Ab Global 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 Ab Global Risk, you can compare the effects of market volatilities on Barings Global and Ab 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 Global with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Ab Global.
Diversification Opportunities for Barings Global and Ab Global
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and CABIX is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Ab Global Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Risk 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Risk has no effect on the direction of Barings Global i.e., Barings Global and Ab Global go up and down completely randomly.
Pair Corralation between Barings Global and Ab Global
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.25 times more return on investment than Ab Global. However, Barings Global Floating is 4.03 times less risky than Ab Global. It trades about 0.3 of its potential returns per unit of risk. Ab Global Risk is currently generating about 0.03 per unit of risk. If you would invest 871.00 in Barings Global Floating on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Barings Global Floating or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Ab Global Risk
Performance |
| Timeline |
| Barings Global Floating |
| Ab Global Risk |
Barings Global and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Ab Global
The main advantage of trading using opposite Barings Global and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Ab 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 Ab Global will offset losses from the drop in Ab Global'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 |
| Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Minnesota Portfolio |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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