Correlation Between Barings Global and Vanguard Global
Can any of the company-specific risk be diversified away by investing in both Barings Global and Vanguard 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 Vanguard 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 Vanguard Global Credit, you can compare the effects of market volatilities on Barings Global and Vanguard 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 Vanguard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Vanguard Global.
Diversification Opportunities for Barings Global and Vanguard Global
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and Vanguard is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Vanguard Global Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Global Credit 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 Vanguard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Global Credit has no effect on the direction of Barings Global i.e., Barings Global and Vanguard Global go up and down completely randomly.
Pair Corralation between Barings Global and Vanguard Global
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.64 times more return on investment than Vanguard Global. However, Barings Global Floating is 1.56 times less risky than Vanguard Global. It trades about 0.18 of its potential returns per unit of risk. Vanguard Global Credit is currently generating about 0.09 per unit of risk. If you would invest 814.00 in Barings Global Floating on November 3, 2024 and sell it today you would earn a total of 61.00 from holding Barings Global Floating or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Vanguard Global Credit
Performance |
| Timeline |
| Barings Global Floating |
| Vanguard Global Credit |
Barings Global and Vanguard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Vanguard Global
The main advantage of trading using opposite Barings Global and Vanguard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Vanguard 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 Vanguard Global will offset losses from the drop in Vanguard Global's long position.| Barings Global vs. Rbc Global Equity | Barings Global vs. Us Global Investors | Barings Global vs. Gmo Global Equity | Barings Global vs. Aqr Global Macro |
| Vanguard Global vs. Smallcap World Fund | Vanguard Global vs. Gmo Global Equity | Vanguard Global vs. Enhanced Fixed Income | Vanguard Global vs. Old Westbury Fixed |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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