Correlation Between Barings Us and Leader Short
Can any of the company-specific risk be diversified away by investing in both Barings Us and Leader Short 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 Leader Short 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 Leader Short Term Bond, you can compare the effects of market volatilities on Barings Us and Leader Short 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 Leader Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Leader Short.
Diversification Opportunities for Barings Us and Leader Short
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Leader is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Leader Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Short Term 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 Leader Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Short Term has no effect on the direction of Barings Us i.e., Barings Us and Leader Short go up and down completely randomly.
Pair Corralation between Barings Us and Leader Short
Assuming the 90 days horizon Barings Us is expected to generate 1.48 times less return on investment than Leader Short. But when comparing it to its historical volatility, Barings High Yield is 1.03 times less risky than Leader Short. It trades about 0.28 of its potential returns per unit of risk. Leader Short Term Bond is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 816.00 in Leader Short Term Bond on October 23, 2024 and sell it today you would earn a total of 12.00 from holding Leader Short Term Bond or generate 1.47% 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. Leader Short Term Bond
Performance |
| Timeline |
| Barings High Yield |
| Leader Short Term |
Barings Us and Leader Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Leader Short
The main advantage of trading using opposite Barings Us and Leader Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Leader Short 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 Leader Short will offset losses from the drop in Leader Short's long position.| Barings Us vs. Dreyfus High Yield | Barings Us vs. Blackrock High Yield | Barings Us vs. Jpmorgan High Yield | Barings Us vs. Federated High Yield |
| Leader Short vs. Gmo Global Equity | Leader Short vs. Dreyfusstandish Global Fixed | Leader Short vs. Kinetics Global Fund | Leader Short vs. Dreyfusstandish Global Fixed |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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