Correlation Between Barings Global and Icon Bond
Can any of the company-specific risk be diversified away by investing in both Barings Global and Icon Bond 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 Icon Bond 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 Icon Bond Fund, you can compare the effects of market volatilities on Barings Global and Icon Bond 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 Icon Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Icon Bond.
Diversification Opportunities for Barings Global and Icon Bond
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Icon is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Icon Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Bond Fund 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 Icon Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Bond Fund has no effect on the direction of Barings Global i.e., Barings Global and Icon Bond go up and down completely randomly.
Pair Corralation between Barings Global and Icon Bond
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.97 times more return on investment than Icon Bond. However, Barings Global Floating is 1.04 times less risky than Icon Bond. It trades about 0.37 of its potential returns per unit of risk. Icon Bond Fund is currently generating about 0.12 per unit of risk. If you would invest 870.00 in Barings Global Floating on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Barings Global Floating or generate 1.03% 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. Icon Bond Fund
Performance |
| Timeline |
| Barings Global Floating |
| Icon Bond Fund |
Barings Global and Icon Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Icon Bond
The main advantage of trading using opposite Barings Global and Icon Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Icon Bond 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 Icon Bond will offset losses from the drop in Icon Bond's long position.| Barings Global vs. Janus High Yield Fund | Barings Global vs. Buffalo High Yield | Barings Global vs. Pace High Yield | Barings Global vs. Msift High Yield |
| Icon Bond vs. Morningstar Defensive Bond | Icon Bond vs. The National Tax Free | Icon Bond vs. Ishares Municipal Bond | Icon Bond vs. Ambrus Core Bond |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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