Correlation Between Barings Us and Advantage Portfolio
Can any of the company-specific risk be diversified away by investing in both Barings Us and Advantage Portfolio 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 Advantage Portfolio 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 Advantage Portfolio Class, you can compare the effects of market volatilities on Barings Us and Advantage Portfolio 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 Advantage Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Advantage Portfolio.
Diversification Opportunities for Barings Us and Advantage Portfolio
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Advantage is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Advantage Portfolio Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Portfolio Class 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 Advantage Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Portfolio Class has no effect on the direction of Barings Us i.e., Barings Us and Advantage Portfolio go up and down completely randomly.
Pair Corralation between Barings Us and Advantage Portfolio
Assuming the 90 days horizon Barings High Yield is expected to generate 0.09 times more return on investment than Advantage Portfolio. However, Barings High Yield is 10.92 times less risky than Advantage Portfolio. It trades about -0.37 of its potential returns per unit of risk. Advantage Portfolio Class is currently generating about -0.12 per unit of risk. If you would invest 821.00 in Barings High Yield on October 12, 2024 and sell it today you would lose (10.00) from holding Barings High Yield or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Advantage Portfolio Class
Performance |
| Timeline |
| Barings High Yield |
| Advantage Portfolio Class |
Barings Us and Advantage Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Advantage Portfolio
The main advantage of trading using opposite Barings Us and Advantage Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Advantage Portfolio 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 Advantage Portfolio will offset losses from the drop in Advantage Portfolio's long position.| Barings Us vs. Amg Managers Centersquare | Barings Us vs. Jhancock Real Estate | Barings Us vs. Nexpoint Real Estate | Barings Us vs. Redwood Real Estate |
| Advantage Portfolio vs. Lgm Risk Managed | Advantage Portfolio vs. Lord Abbett Short | Advantage Portfolio vs. Barings High Yield | Advantage Portfolio vs. Dunham High Yield |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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