Correlation Between Barings Global and Global E
Can any of the company-specific risk be diversified away by investing in both Barings Global and Global E 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 Global E 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 Global E Portfolio, you can compare the effects of market volatilities on Barings Global and Global E 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 Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Global E.
Diversification Opportunities for Barings Global and Global E
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Global is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Global E Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Portfolio 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 Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Portfolio has no effect on the direction of Barings Global i.e., Barings Global and Global E go up and down completely randomly.
Pair Corralation between Barings Global and Global E
Assuming the 90 days horizon Barings Global is expected to generate 1.45 times less return on investment than Global E. But when comparing it to its historical volatility, Barings Global Floating is 3.99 times less risky than Global E. It trades about 0.36 of its potential returns per unit of risk. Global E Portfolio is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,133 in Global E Portfolio on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Global E Portfolio or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Barings Global Floating vs. Global E Portfolio
Performance |
| Timeline |
| Barings Global Floating |
| Global E Portfolio |
Barings Global and Global E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Global E
The main advantage of trading using opposite Barings Global and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Global E 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 Global E will offset losses from the drop in Global E's long position.| Barings Global vs. Boston Partners Longshort | Barings Global vs. Barings Active Short | Barings Global vs. Quantitative Longshort Equity | Barings Global vs. Siit Ultra Short |
| Global E vs. Goldman Sachs Inflation | Global E vs. Deutsche Global Inflation | Global E vs. Arrow Managed Futures | Global E vs. Guggenheim Managed Futures |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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