Correlation Between Barings Us and Pace High
Can any of the company-specific risk be diversified away by investing in both Barings Us and Pace High 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 Pace High 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 Pace High Yield, you can compare the effects of market volatilities on Barings Us and Pace High 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 Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Pace High.
Diversification Opportunities for Barings Us and Pace High
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barings and Pace is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Barings Us i.e., Barings Us and Pace High go up and down completely randomly.
Pair Corralation between Barings Us and Pace High
Assuming the 90 days horizon Barings High Yield is expected to generate about the same return on investment as Pace High Yield. However, Barings Us is 1.27 times more volatile than Pace High Yield. It trades about 0.12 of its potential returns per unit of risk. Pace High Yield is currently producing about 0.15 per unit of risk. If you would invest 762.00 in Pace High Yield on October 27, 2024 and sell it today you would earn a total of 132.00 from holding Pace High Yield or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Pace High Yield
Performance |
| Timeline |
| Barings High Yield |
| Pace High Yield |
Barings Us and Pace High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Pace High
The main advantage of trading using opposite Barings Us and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Pace High 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 Pace High will offset losses from the drop in Pace High's long position.| Barings Us vs. Barings Active Short | Barings Us vs. Barings Emerging Markets | Barings Us vs. Barings Emerging Markets | Barings Us vs. Barings Active Short |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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