Correlation Between Barings Global and Parametric International
Can any of the company-specific risk be diversified away by investing in both Barings Global and Parametric International 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 Parametric International 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 Parametric International Equity, you can compare the effects of market volatilities on Barings Global and Parametric International 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 Parametric International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Parametric International.
Diversification Opportunities for Barings Global and Parametric International
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barings and Parametric is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Parametric International Equit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parametric International 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 Parametric International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parametric International has no effect on the direction of Barings Global i.e., Barings Global and Parametric International go up and down completely randomly.
Pair Corralation between Barings Global and Parametric International
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.25 times more return on investment than Parametric International. However, Barings Global Floating is 4.04 times less risky than Parametric International. It trades about 0.22 of its potential returns per unit of risk. Parametric International Equity is currently generating about 0.05 per unit of risk. If you would invest 715.00 in Barings Global Floating on August 30, 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Parametric International Equit
Performance |
| Timeline |
| Barings Global Floating |
| Parametric International |
Barings Global and Parametric International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Parametric International
The main advantage of trading using opposite Barings Global and Parametric International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Parametric International 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 Parametric International will offset losses from the drop in Parametric International's long position.| Barings Global vs. Dimensional Retirement Income | Barings Global vs. Franklin Moderate Allocation | Barings Global vs. Fidelity Managed Retirement | Barings Global vs. Wisdomtree Siegel Moderate |
| Parametric International vs. Eaton Vance Msschsts | Parametric International vs. Eaton Vance Municipal | Parametric International vs. Eaton Vance Municipal | Parametric International vs. Eaton Vance Municipal |
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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