Correlation Between Barings Global and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Barings Global and Barings Emerging 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 Barings Emerging 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 Barings Emerging Markets, you can compare the effects of market volatilities on Barings Global and Barings Emerging 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 Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Barings Emerging.
Diversification Opportunities for Barings Global and Barings Emerging
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and Barings is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets 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 Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Barings Global i.e., Barings Global and Barings Emerging go up and down completely randomly.
Pair Corralation between Barings Global and Barings Emerging
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.35 times more return on investment than Barings Emerging. However, Barings Global Floating is 2.85 times less risky than Barings Emerging. It trades about 0.34 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 871.00 in Barings Global Floating on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Barings Global Floating or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Barings Global Floating vs. Barings Emerging Markets
Performance |
| Timeline |
| Barings Global Floating |
| Barings Emerging Markets |
Barings Global and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Barings Emerging
The main advantage of trading using opposite Barings Global and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Barings Emerging 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Barings Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
| Barings Emerging vs. Dreyfus Government Cash | Barings Emerging vs. Us Government Plus | Barings Emerging vs. John Hancock Government | Barings Emerging vs. Franklin Adjustable Government |
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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