Correlation Between Barings Global and Cref Money
Can any of the company-specific risk be diversified away by investing in both Barings Global and Cref Money 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 Cref Money 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 Cref Money Market, you can compare the effects of market volatilities on Barings Global and Cref Money 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 Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Cref Money.
Diversification Opportunities for Barings Global and Cref Money
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Cref is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market 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 Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Barings Global i.e., Barings Global and Cref Money go up and down completely randomly.
Pair Corralation between Barings Global and Cref Money
Assuming the 90 days horizon Barings Global Floating is expected to generate 8.46 times more return on investment than Cref Money. However, Barings Global is 8.46 times more volatile than Cref Money Market. It trades about 0.18 of its potential returns per unit of risk. Cref Money Market is currently generating about 0.98 per unit of risk. If you would invest 826.00 in Barings Global Floating on October 25, 2024 and sell it today you would earn a total of 51.00 from holding Barings Global Floating or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Cref Money Market
Performance |
| Timeline |
| Barings Global Floating |
| Cref Money Market |
Barings Global and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Cref Money
The main advantage of trading using opposite Barings Global and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.| Barings Global vs. Enhanced Fixed Income | Barings Global vs. Gmo Global Equity | Barings Global vs. Calvert International Equity | Barings Global vs. Us Vector Equity |
| Cref Money vs. Hsbc Government Money | Cref Money vs. Schwab Government Money | Cref Money vs. Dreyfus Government Cash | Cref Money vs. Payden Government Fund |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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