Correlation Between Barings Us and Miller Convertible
Can any of the company-specific risk be diversified away by investing in both Barings Us and Miller Convertible 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 Miller Convertible 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 Miller Vertible Bond, you can compare the effects of market volatilities on Barings Us and Miller Convertible 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 Miller Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Miller Convertible.
Diversification Opportunities for Barings Us and Miller Convertible
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Miller is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Miller Vertible Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Vertible 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 Miller Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Vertible Bond has no effect on the direction of Barings Us i.e., Barings Us and Miller Convertible go up and down completely randomly.
Pair Corralation between Barings Us and Miller Convertible
Assuming the 90 days horizon Barings High Yield is expected to generate 0.6 times more return on investment than Miller Convertible. However, Barings High Yield is 1.68 times less risky than Miller Convertible. It trades about 0.28 of its potential returns per unit of risk. Miller Vertible Bond is currently generating about 0.09 per unit of risk. If you would invest 806.00 in Barings High Yield on October 25, 2024 and sell it today you would earn a total of 8.00 from holding Barings High Yield or generate 0.99% 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. Miller Vertible Bond
Performance |
| Timeline |
| Barings High Yield |
| Miller Vertible Bond |
Barings Us and Miller Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Miller Convertible
The main advantage of trading using opposite Barings Us and Miller Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Miller Convertible 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 Miller Convertible will offset losses from the drop in Miller Convertible'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 |
| Miller Convertible vs. Morningstar Defensive Bond | Miller Convertible vs. T Rowe Price | Miller Convertible vs. Ambrus Core Bond | Miller Convertible vs. Intermediate Term Tax Free Bond |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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