Correlation Between Barings Global and Wcm China
Can any of the company-specific risk be diversified away by investing in both Barings Global and Wcm China 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 Wcm China 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 Wcm China Quality, you can compare the effects of market volatilities on Barings Global and Wcm China 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 Wcm China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Wcm China.
Diversification Opportunities for Barings Global and Wcm China
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Wcm is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Wcm China Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wcm China Quality 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 Wcm China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wcm China Quality has no effect on the direction of Barings Global i.e., Barings Global and Wcm China go up and down completely randomly.
Pair Corralation between Barings Global and Wcm China
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.04 times more return on investment than Wcm China. However, Barings Global Floating is 26.39 times less risky than Wcm China. It trades about 0.31 of its potential returns per unit of risk. Wcm China Quality is currently generating about -0.14 per unit of risk. If you would invest 875.00 in Barings Global Floating on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Barings Global Floating or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Barings Global Floating vs. Wcm China Quality
Performance |
| Timeline |
| Barings Global Floating |
| Wcm China Quality |
Barings Global and Wcm China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Wcm China
The main advantage of trading using opposite Barings Global and Wcm China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Wcm China 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 Wcm China will offset losses from the drop in Wcm China's long position.| Barings Global vs. Dreyfusstandish Global Fixed | Barings Global vs. Morningstar Global Income | Barings Global vs. Franklin Mutual Global | Barings Global vs. Ab Global Real |
| Wcm China vs. Franklin Government Money | Wcm China vs. Wells Fargo Funds | Wcm China vs. Elfun Government Money | Wcm China vs. General Money Market |
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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