Correlation Between Barings Global and Enhanced
Can any of the company-specific risk be diversified away by investing in both Barings Global and Enhanced 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 Enhanced 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 Enhanced Large Pany, you can compare the effects of market volatilities on Barings Global and Enhanced 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 Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Enhanced.
Diversification Opportunities for Barings Global and Enhanced
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Enhanced is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Enhanced Large Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhanced Large Pany 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 Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhanced Large Pany has no effect on the direction of Barings Global i.e., Barings Global and Enhanced go up and down completely randomly.
Pair Corralation between Barings Global and Enhanced
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.09 times more return on investment than Enhanced. However, Barings Global Floating is 11.15 times less risky than Enhanced. It trades about -0.12 of its potential returns per unit of risk. Enhanced Large Pany is currently generating about -0.12 per unit of risk. If you would invest 878.00 in Barings Global Floating on October 10, 2024 and sell it today you would lose (2.00) from holding Barings Global Floating or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Enhanced Large Pany
Performance |
| Timeline |
| Barings Global Floating |
| Enhanced Large Pany |
Barings Global and Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Enhanced
The main advantage of trading using opposite Barings Global and Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Enhanced 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 Enhanced will offset losses from the drop in Enhanced's long position.| Barings Global vs. Red Oak Technology | Barings Global vs. Janus Global Technology | Barings Global vs. Towpath Technology | Barings Global vs. Technology Ultrasector Profund |
| Enhanced vs. Us Micro Cap | Enhanced vs. Dfa Short Term Government | Enhanced vs. Emerging Markets Small | Enhanced vs. Dfa One Year Fixed |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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