Correlation Between Barings Us and Eventide Core
Can any of the company-specific risk be diversified away by investing in both Barings Us and Eventide Core 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 Eventide Core 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 Eventide Core Bond, you can compare the effects of market volatilities on Barings Us and Eventide Core 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 Eventide Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Eventide Core.
Diversification Opportunities for Barings Us and Eventide Core
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Eventide is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Eventide Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Core 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 Eventide Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Core Bond has no effect on the direction of Barings Us i.e., Barings Us and Eventide Core go up and down completely randomly.
Pair Corralation between Barings Us and Eventide Core
Assuming the 90 days horizon Barings Us is expected to generate 2.34 times less return on investment than Eventide Core. But when comparing it to its historical volatility, Barings High Yield is 1.82 times less risky than Eventide Core. It trades about 0.22 of its potential returns per unit of risk. Eventide Core Bond is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 806.00 in Eventide Core Bond on November 9, 2024 and sell it today you would earn a total of 14.00 from holding Eventide Core Bond or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Eventide Core Bond
Performance |
| Timeline |
| Barings High Yield |
| Eventide Core Bond |
Barings Us and Eventide Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Eventide Core
The main advantage of trading using opposite Barings Us and Eventide Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Eventide Core 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 Eventide Core will offset losses from the drop in Eventide Core's long position.| Barings Us vs. Towpath Technology | Barings Us vs. Technology Ultrasector Profund | Barings Us vs. Red Oak Technology | Barings Us vs. Blackrock Science Technology |
| Eventide Core vs. Icon Financial Fund | Eventide Core vs. John Hancock Financial | Eventide Core vs. Rmb Mendon Financial | Eventide Core vs. Financials Ultrasector Profund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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