Correlation Between Barings Us and Enhanced Fixed
Can any of the company-specific risk be diversified away by investing in both Barings Us and Enhanced Fixed 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 Us and Enhanced Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings High Yield and Enhanced Fixed Income, you can compare the effects of market volatilities on Barings Us and Enhanced Fixed 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 Us with a short position of Enhanced Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Enhanced Fixed.
Diversification Opportunities for Barings Us and Enhanced Fixed
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Enhanced is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Enhanced Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhanced Fixed Income and Barings Us 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 High Yield are associated (or correlated) with Enhanced Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhanced Fixed Income has no effect on the direction of Barings Us i.e., Barings Us and Enhanced Fixed go up and down completely randomly.
Pair Corralation between Barings Us and Enhanced Fixed
Assuming the 90 days horizon Barings High Yield is expected to generate 0.67 times more return on investment than Enhanced Fixed. However, Barings High Yield is 1.5 times less risky than Enhanced Fixed. It trades about 0.15 of its potential returns per unit of risk. Enhanced Fixed Income is currently generating about 0.08 per unit of risk. If you would invest 676.00 in Barings High Yield on November 1, 2024 and sell it today you would earn a total of 140.00 from holding Barings High Yield or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Barings High Yield vs. Enhanced Fixed Income
Performance |
| Timeline |
| Barings High Yield |
| Enhanced Fixed Income |
Barings Us and Enhanced Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Enhanced Fixed
The main advantage of trading using opposite Barings Us and Enhanced Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Enhanced Fixed 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 Enhanced Fixed will offset losses from the drop in Enhanced Fixed's long position.| Barings Us vs. Virtus High Yield | Barings Us vs. Ab High Income | Barings Us vs. Prudential High Yield | Barings Us vs. Millerhoward High Income |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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