Correlation Between Barings Global and The Gold
Can any of the company-specific risk be diversified away by investing in both Barings Global and The Gold 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 The Gold 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 The Gold Bullion, you can compare the effects of market volatilities on Barings Global and The Gold 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 The Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and The Gold.
Diversification Opportunities for Barings Global and The Gold
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and The is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion 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 The Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bullion has no effect on the direction of Barings Global i.e., Barings Global and The Gold go up and down completely randomly.
Pair Corralation between Barings Global and The Gold
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.02 times more return on investment than The Gold. However, Barings Global Floating is 52.4 times less risky than The Gold. It trades about -0.13 of its potential returns per unit of risk. The Gold Bullion is currently generating about -0.24 per unit of risk. If you would invest 878.00 in Barings Global Floating on October 10, 2024 and sell it today you would lose (2.00) from holding Barings Global Floating or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. The Gold Bullion
Performance |
| Timeline |
| Barings Global Floating |
| Gold Bullion |
Barings Global and The Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and The Gold
The main advantage of trading using opposite Barings Global and The Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, The Gold 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 The Gold will offset losses from the drop in The Gold's long position.| Barings Global vs. Red Oak Technology | Barings Global vs. Janus Global Technology | Barings Global vs. Towpath Technology | Barings Global vs. Technology Ultrasector Profund |
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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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