Correlation Between Barings Global and Federated Total
Can any of the company-specific risk be diversified away by investing in both Barings Global and Federated Total 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 Federated Total 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 Federated Total Return, you can compare the effects of market volatilities on Barings Global and Federated Total 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 Federated Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Federated Total.
Diversification Opportunities for Barings Global and Federated Total
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barings and Federated is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return 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 Federated Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Barings Global i.e., Barings Global and Federated Total go up and down completely randomly.
Pair Corralation between Barings Global and Federated Total
Assuming the 90 days horizon Barings Global is expected to generate 1.29 times less return on investment than Federated Total. But when comparing it to its historical volatility, Barings Global Floating is 2.14 times less risky than Federated Total. It trades about 0.17 of its potential returns per unit of risk. Federated Total Return is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 913.00 in Federated Total Return on August 29, 2024 and sell it today you would earn a total of 37.00 from holding Federated Total Return or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Federated Total Return
Performance |
| Timeline |
| Barings Global Floating |
| Federated Total Return |
Barings Global and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Federated Total
The main advantage of trading using opposite Barings Global and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Federated Total 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 Federated Total will offset losses from the drop in Federated Total's long position.| Barings Global vs. Floating Rate Fund | Barings Global vs. Lord Abbett Inv | Barings Global vs. HUMANA INC | Barings Global vs. Aquagold International |
| Federated Total vs. Mirova Global Green | Federated Total vs. Scharf Global Opportunity | Federated Total vs. Wisdomtree Siegel Global | Federated Total vs. Barings Global Floating |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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