Correlation Between Barings Us and Barings Active
Can any of the company-specific risk be diversified away by investing in both Barings Us and Barings Active 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 Barings Active 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 Barings Active Short, you can compare the effects of market volatilities on Barings Us and Barings Active 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 Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Barings Active.
Diversification Opportunities for Barings Us and Barings Active
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barings and Barings is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short 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 Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Barings Us i.e., Barings Us and Barings Active go up and down completely randomly.
Pair Corralation between Barings Us and Barings Active
Assuming the 90 days horizon Barings High Yield is expected to generate 1.86 times more return on investment than Barings Active. However, Barings Us is 1.86 times more volatile than Barings Active Short. It trades about 0.12 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.17 per unit of risk. If you would invest 684.00 in Barings High Yield on August 24, 2024 and sell it today you would earn a total of 133.00 from holding Barings High Yield or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Barings Active Short
Performance |
| Timeline |
| Barings High Yield |
| Barings Active Short |
Barings Us and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Barings Active
The main advantage of trading using opposite Barings Us and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Barings Active 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 Active will offset losses from the drop in Barings Active's long position.| Barings Us vs. Qs Large Cap | Barings Us vs. Upright Assets Allocation | Barings Us vs. Old Westbury Large | Barings Us vs. Falcon Focus Scv |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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