Correlation Between Barings Us and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Barings Us and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on Barings Us and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Arrow Managed.
Diversification Opportunities for Barings Us and Arrow Managed
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Arrow is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Barings Us i.e., Barings Us and Arrow Managed go up and down completely randomly.
Pair Corralation between Barings Us and Arrow Managed
Assuming the 90 days horizon Barings High Yield is expected to under-perform the Arrow Managed. But the mutual fund apears to be less risky and, when comparing its historical volatility, Barings High Yield is 6.83 times less risky than Arrow Managed. The mutual fund trades about -0.35 of its potential returns per unit of risk. The Arrow Managed Futures is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 576.00 in Arrow Managed Futures on October 15, 2024 and sell it today you would earn a total of 16.00 from holding Arrow Managed Futures or generate 2.78% 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. Arrow Managed Futures
Performance |
| Timeline |
| Barings High Yield |
| Arrow Managed Futures |
Barings Us and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Arrow Managed
The main advantage of trading using opposite Barings Us and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Barings Us vs. Needham Aggressive Growth | Barings Us vs. Catalystsmh High Income | Barings Us vs. Virtus High Yield | Barings Us vs. Ab High Income |
| Arrow Managed vs. Barings High Yield | Arrow Managed vs. Artisan High Income | Arrow Managed vs. Morningstar Defensive Bond | Arrow Managed vs. T Rowe Price |
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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