Correlation Between Barings Us and Global Technology
Can any of the company-specific risk be diversified away by investing in both Barings Us and Global Technology 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 Global Technology 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 Global Technology Portfolio, you can compare the effects of market volatilities on Barings Us and Global Technology 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 Global Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Global Technology.
Diversification Opportunities for Barings Us and Global Technology
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Global is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Global Technology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Technology 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 Global Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Technology has no effect on the direction of Barings Us i.e., Barings Us and Global Technology go up and down completely randomly.
Pair Corralation between Barings Us and Global Technology
Assuming the 90 days horizon Barings Us is expected to generate 3.06 times less return on investment than Global Technology. But when comparing it to its historical volatility, Barings High Yield is 6.9 times less risky than Global Technology. It trades about 0.19 of its potential returns per unit of risk. Global Technology Portfolio is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,941 in Global Technology Portfolio on October 25, 2024 and sell it today you would earn a total of 272.00 from holding Global Technology Portfolio or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Global Technology Portfolio
Performance |
| Timeline |
| Barings High Yield |
| Global Technology |
Barings Us and Global Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Global Technology
The main advantage of trading using opposite Barings Us and Global Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Global Technology 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 Global Technology will offset losses from the drop in Global Technology's long position.| Barings Us vs. Nuveen Mid Cap | Barings Us vs. Shelton E Value | Barings Us vs. Western Asset Adjustable | Barings Us vs. Issachar Fund Class |
| Global Technology vs. Small Pany Growth | Global Technology vs. Tax Managed Mid Small | Global Technology vs. Rbc Small Cap | Global Technology vs. Ab Small Cap |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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