Correlation Between Barings Us and Barings Global
Can any of the company-specific risk be diversified away by investing in both Barings Us and Barings Global 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 Global 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 Global Floating, you can compare the effects of market volatilities on Barings Us and Barings Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Barings Global.
Diversification Opportunities for Barings Us and Barings Global
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barings and Barings is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Floating has no effect on the direction of Barings Us i.e., Barings Us and Barings Global go up and down completely randomly.
Pair Corralation between Barings Us and Barings Global
Assuming the 90 days horizon Barings Us is expected to generate 1.01 times less return on investment than Barings Global. In addition to that, Barings Us is 1.68 times more volatile than Barings Global Floating. It trades about 0.13 of its total potential returns per unit of risk. Barings Global Floating is currently generating about 0.21 per unit of volatility. If you would invest 725.00 in Barings Global Floating on August 27, 2024 and sell it today you would earn a total of 148.00 from holding Barings Global Floating or generate 20.41% 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 Global Floating
Performance |
| Timeline |
| Barings High Yield |
| Barings Global Floating |
Barings Us and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Barings Global
The main advantage of trading using opposite Barings Us and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Barings Global 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 Global will offset losses from the drop in Barings Global's long position.| Barings Us vs. Barings Active Short | Barings Us vs. Barings Emerging Markets | Barings Us vs. Barings Emerging Markets | Barings Us vs. Barings Active Short |
| Barings Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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