Correlation Between Barings Global and Capital Income
Can any of the company-specific risk be diversified away by investing in both Barings Global and Capital Income 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 Capital Income 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 Capital Income Builder, you can compare the effects of market volatilities on Barings Global and Capital Income 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 Capital Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Capital Income.
Diversification Opportunities for Barings Global and Capital Income
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Capital is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Capital Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Income Builder 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 Capital Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Income Builder has no effect on the direction of Barings Global i.e., Barings Global and Capital Income go up and down completely randomly.
Pair Corralation between Barings Global and Capital Income
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.36 times more return on investment than Capital Income. However, Barings Global Floating is 2.82 times less risky than Capital Income. It trades about 0.19 of its potential returns per unit of risk. Capital Income Builder is currently generating about 0.06 per unit of risk. If you would invest 736.00 in Barings Global Floating on October 25, 2024 and sell it today you would earn a total of 141.00 from holding Barings Global Floating or generate 19.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Capital Income Builder
Performance |
| Timeline |
| Barings Global Floating |
| Capital Income Builder |
Barings Global and Capital Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Capital Income
The main advantage of trading using opposite Barings Global and Capital Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Capital Income 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 Capital Income will offset losses from the drop in Capital Income'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 |
| Capital Income vs. Allianzgi Diversified Income | Capital Income vs. Fulcrum Diversified Absolute | Capital Income vs. Guggenheim Diversified Income | Capital Income vs. Oklahoma College Savings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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