Correlation Between Barings Global and Us Global
Can any of the company-specific risk be diversified away by investing in both Barings Global and Us Global 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 Us Global 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 Us Global Leaders, you can compare the effects of market volatilities on Barings Global and Us Global 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 Us Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Us Global.
Diversification Opportunities for Barings Global and Us Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and USGLX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Us Global Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Global Leaders 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 Us Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Global Leaders has no effect on the direction of Barings Global i.e., Barings Global and Us Global go up and down completely randomly.
Pair Corralation between Barings Global and Us Global
Assuming the 90 days horizon Barings Global is expected to generate 5.6 times less return on investment than Us Global. But when comparing it to its historical volatility, Barings Global Floating is 8.6 times less risky than Us Global. It trades about 0.33 of its potential returns per unit of risk. Us Global Leaders is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 7,297 in Us Global Leaders on August 29, 2024 and sell it today you would earn a total of 328.00 from holding Us Global Leaders or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Us Global Leaders
Performance |
| Timeline |
| Barings Global Floating |
| Us Global Leaders |
Barings Global and Us Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Us Global
The main advantage of trading using opposite Barings Global and Us Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Us Global 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 Us Global will offset losses from the drop in Us Global's long position.| Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Floating Rate Fund | Barings Global vs. Lord Abbett Inv | Barings Global vs. HUMANA INC |
| Us Global vs. Growth Fund Of | Us Global vs. HUMANA INC | Us Global vs. Aquagold International | Us Global vs. Barloworld Ltd ADR |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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