Correlation Between Barings Us and Inflation-adjusted
Can any of the company-specific risk be diversified away by investing in both Barings Us and Inflation-adjusted 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 Inflation-adjusted 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 Inflation Adjusted Bond Fund, you can compare the effects of market volatilities on Barings Us and Inflation-adjusted 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 Inflation-adjusted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Inflation-adjusted.
Diversification Opportunities for Barings Us and Inflation-adjusted
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barings and INFLATION-ADJUSTED is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Inflation Adjusted Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Adjusted Bond 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 Inflation-adjusted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Adjusted Bond has no effect on the direction of Barings Us i.e., Barings Us and Inflation-adjusted go up and down completely randomly.
Pair Corralation between Barings Us and Inflation-adjusted
Assuming the 90 days horizon Barings High Yield is expected to generate 0.72 times more return on investment than Inflation-adjusted. However, Barings High Yield is 1.39 times less risky than Inflation-adjusted. It trades about 0.13 of its potential returns per unit of risk. Inflation Adjusted Bond Fund is currently generating about 0.03 per unit of risk. If you would invest 688.00 in Barings High Yield on November 1, 2024 and sell it today you would earn a total of 128.00 from holding Barings High Yield or generate 18.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Inflation Adjusted Bond Fund
Performance |
| Timeline |
| Barings High Yield |
| Inflation Adjusted Bond |
Barings Us and Inflation-adjusted Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Inflation-adjusted
The main advantage of trading using opposite Barings Us and Inflation-adjusted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Inflation-adjusted 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 Inflation-adjusted will offset losses from the drop in Inflation-adjusted'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 |
| Inflation-adjusted vs. T Rowe Price | Inflation-adjusted vs. Vanguard Financials Index | Inflation-adjusted vs. T Rowe Price | Inflation-adjusted vs. Prudential Financial Services |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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