Correlation Between Barings Global and Global Infrastructure
Can any of the company-specific risk be diversified away by investing in both Barings Global and Global Infrastructure 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 Infrastructure 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 Infrastructure Fund, you can compare the effects of market volatilities on Barings Global and Global Infrastructure 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 Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Global Infrastructure.
Diversification Opportunities for Barings Global and Global Infrastructure
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barings and Global is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Global Infrastructure Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Infrastructure 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 Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Infrastructure has no effect on the direction of Barings Global i.e., Barings Global and Global Infrastructure go up and down completely randomly.
Pair Corralation between Barings Global and Global Infrastructure
Assuming the 90 days horizon Barings Global is expected to generate 9.18 times less return on investment than Global Infrastructure. But when comparing it to its historical volatility, Barings Global Floating is 11.97 times less risky than Global Infrastructure. It trades about 0.3 of its potential returns per unit of risk. Global Infrastructure Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 940.00 in Global Infrastructure Fund on September 1, 2024 and sell it today you would earn a total of 31.00 from holding Global Infrastructure Fund or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Barings Global Floating vs. Global Infrastructure Fund
Performance |
| Timeline |
| Barings Global Floating |
| Global Infrastructure |
Barings Global and Global Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Global Infrastructure
The main advantage of trading using opposite Barings Global and Global Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Global Infrastructure 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 Infrastructure will offset losses from the drop in Global Infrastructure's long position.| Barings Global vs. Ashmore Emerging Markets | Barings Global vs. Dws Emerging Markets | Barings Global vs. Rbc Emerging Markets | Barings Global vs. Franklin Emerging Market |
| Global Infrastructure vs. Franklin Emerging Market | Global Infrastructure vs. Investec Emerging Markets | Global Infrastructure vs. Black Oak Emerging | Global Infrastructure vs. Goldman Sachs Emerging |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |