Correlation Between Barings Global and Locorr Long/short
Can any of the company-specific risk be diversified away by investing in both Barings Global and Locorr Long/short 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 Locorr Long/short 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 Locorr Longshort Modities, you can compare the effects of market volatilities on Barings Global and Locorr Long/short 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 Locorr Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Locorr Long/short.
Diversification Opportunities for Barings Global and Locorr Long/short
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Locorr is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Locorr Longshort Modities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Longshort Modities 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 Locorr Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Longshort Modities has no effect on the direction of Barings Global i.e., Barings Global and Locorr Long/short go up and down completely randomly.
Pair Corralation between Barings Global and Locorr Long/short
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.31 times more return on investment than Locorr Long/short. However, Barings Global Floating is 3.24 times less risky than Locorr Long/short. It trades about 0.17 of its potential returns per unit of risk. Locorr Longshort Modities is currently generating about -0.07 per unit of risk. If you would invest 860.00 in Barings Global Floating on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Barings Global Floating or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Locorr Longshort Modities
Performance |
| Timeline |
| Barings Global Floating |
| Locorr Longshort Modities |
Barings Global and Locorr Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Locorr Long/short
The main advantage of trading using opposite Barings Global and Locorr Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Locorr Long/short 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 Locorr Long/short will offset losses from the drop in Locorr Long/short's long position.| Barings Global vs. Bbh Intermediate Municipal | Barings Global vs. Intermediate Term Bond Fund | Barings Global vs. Franklin Government Money | Barings Global vs. Intermediate Bond Fund |
| Locorr Long/short vs. Delaware Limited Term Diversified | Locorr Long/short vs. Madison Diversified Income | Locorr Long/short vs. Stone Ridge Diversified | Locorr Long/short vs. Diversified Real Asset |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |