Correlation Between Barings Us and Great West
Can any of the company-specific risk be diversified away by investing in both Barings Us and Great West 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 Great West 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 Great West Lifetime 2020, you can compare the effects of market volatilities on Barings Us and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Great West.
Diversification Opportunities for Barings Us and Great West
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Great is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Great West Lifetime 2020 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifetime 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifetime has no effect on the direction of Barings Us i.e., Barings Us and Great West go up and down completely randomly.
Pair Corralation between Barings Us and Great West
Assuming the 90 days horizon Barings High Yield is expected to generate 0.49 times more return on investment than Great West. However, Barings High Yield is 2.06 times less risky than Great West. It trades about 0.18 of its potential returns per unit of risk. Great West Lifetime 2020 is currently generating about 0.08 per unit of risk. If you would invest 747.00 in Barings High Yield on November 3, 2024 and sell it today you would earn a total of 69.00 from holding Barings High Yield or generate 9.24% 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. Great West Lifetime 2020
Performance |
| Timeline |
| Barings High Yield |
| Great West Lifetime |
Barings Us and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Great West
The main advantage of trading using opposite Barings Us and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Barings Us vs. Allianzgi Convertible Income | Barings Us vs. Fidelity Sai Convertible | Barings Us vs. Calamos Dynamic Convertible | Barings Us vs. Absolute Convertible Arbitrage |
| Great West vs. Ab Bond Inflation | Great West vs. Tiaa Cref Inflation Linked Bond | Great West vs. Simt Multi Asset Inflation | Great West vs. Guidepath Managed Futures |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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