Correlation Between Barings Global and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Barings Global and Glg Intl 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 Glg Intl 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 Glg Intl Small, you can compare the effects of market volatilities on Barings Global and Glg Intl 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 Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Glg Intl.
Diversification Opportunities for Barings Global and Glg Intl
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Glg is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small 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 Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Barings Global i.e., Barings Global and Glg Intl go up and down completely randomly.
Pair Corralation between Barings Global and Glg Intl
Assuming the 90 days horizon Barings Global is expected to generate 2.4 times less return on investment than Glg Intl. But when comparing it to its historical volatility, Barings Global Floating is 5.73 times less risky than Glg Intl. It trades about 0.19 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,035 in Glg Intl Small on October 29, 2024 and sell it today you would earn a total of 2,837 from holding Glg Intl Small or generate 47.01% 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. Glg Intl Small
Performance |
| Timeline |
| Barings Global Floating |
| Glg Intl Small |
Barings Global and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Glg Intl
The main advantage of trading using opposite Barings Global and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Glg Intl 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 Glg Intl will offset losses from the drop in Glg Intl's long position.| Barings Global vs. Upright Assets Allocation | Barings Global vs. Enhanced Large Pany | Barings Global vs. Us Large Pany | Barings Global vs. Growth Allocation Fund |
| Glg Intl vs. Guggenheim Managed Futures | Glg Intl vs. Short Duration Inflation | Glg Intl vs. Ab Bond Inflation | Glg Intl vs. Tiaa Cref Inflation Link |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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