Correlation Between Barings Global and Columbia High
Can any of the company-specific risk be diversified away by investing in both Barings Global and Columbia High 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 Columbia High 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 Columbia High Yield, you can compare the effects of market volatilities on Barings Global and Columbia High 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 Columbia High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Columbia High.
Diversification Opportunities for Barings Global and Columbia High
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Columbia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Columbia High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia High Yield 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 Columbia High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia High Yield has no effect on the direction of Barings Global i.e., Barings Global and Columbia High go up and down completely randomly.
Pair Corralation between Barings Global and Columbia High
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.64 times more return on investment than Columbia High. However, Barings Global Floating is 1.56 times less risky than Columbia High. It trades about 0.22 of its potential returns per unit of risk. Columbia High Yield is currently generating about 0.12 per unit of risk. If you would invest 715.00 in Barings Global Floating on August 29, 2024 and sell it today you would earn a total of 163.00 from holding Barings Global Floating or generate 22.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Columbia High Yield
Performance |
| Timeline |
| Barings Global Floating |
| Columbia High Yield |
Barings Global and Columbia High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Columbia High
The main advantage of trading using opposite Barings Global and Columbia High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Columbia High 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 Columbia High will offset losses from the drop in Columbia High's long position.| Barings Global vs. Floating Rate Fund | Barings Global vs. Lord Abbett Inv | Barings Global vs. HUMANA INC | Barings Global vs. Aquagold International |
| Columbia High vs. Ab Global Risk | Columbia High vs. Dreyfusstandish Global Fixed | Columbia High vs. Kinetics Global Fund | Columbia High 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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