Correlation Between Barings Global and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Barings Global and Old Westbury 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 Old Westbury 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 Old Westbury Municipal, you can compare the effects of market volatilities on Barings Global and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Old Westbury.
Diversification Opportunities for Barings Global and Old Westbury
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and Old is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Barings Global i.e., Barings Global and Old Westbury go up and down completely randomly.
Pair Corralation between Barings Global and Old Westbury
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.93 times more return on investment than Old Westbury. However, Barings Global Floating is 1.08 times less risky than Old Westbury. It trades about 0.37 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.12 per unit of risk. If you would invest 870.00 in Barings Global Floating on September 15, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Old Westbury Municipal
Performance |
| Timeline |
| Barings Global Floating |
| Old Westbury Municipal |
Barings Global and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Old Westbury
The main advantage of trading using opposite Barings Global and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury'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 |
| Old Westbury vs. Barings Global Floating | Old Westbury vs. Morningstar Global Income | Old Westbury vs. Commonwealth Global Fund | Old Westbury vs. Alliancebernstein Global High |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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