Correlation Between Barings Global and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Barings Global and Locorr Market 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 Market 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 Market Trend, you can compare the effects of market volatilities on Barings Global and Locorr Market 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 Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Locorr Market.
Diversification Opportunities for Barings Global and Locorr Market
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and Locorr is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend 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 Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Barings Global i.e., Barings Global and Locorr Market go up and down completely randomly.
Pair Corralation between Barings Global and Locorr Market
Assuming the 90 days horizon Barings Global is expected to generate 1.54 times less return on investment than Locorr Market. But when comparing it to its historical volatility, Barings Global Floating is 4.02 times less risky than Locorr Market. It trades about 0.37 of its potential returns per unit of risk. Locorr Market Trend is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,021 in Locorr Market Trend on September 15, 2024 and sell it today you would earn a total of 16.00 from holding Locorr Market Trend or generate 1.57% 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 Market Trend
Performance |
| Timeline |
| Barings Global Floating |
| Locorr Market Trend |
Barings Global and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Locorr Market
The main advantage of trading using opposite Barings Global and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Locorr Market 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 Market will offset losses from the drop in Locorr Market's long position.| Barings Global vs. Oppenheimer International Diversified | Barings Global vs. Lord Abbett Diversified | Barings Global vs. Pgim Jennison Diversified | Barings Global vs. Small Cap Stock |
| Locorr Market vs. Qs Global Equity | Locorr Market vs. Legg Mason Global | Locorr Market vs. Barings Global Floating | Locorr Market vs. Dreyfusstandish Global 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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