Correlation Between Barings Us and Us Global
Can any of the company-specific risk be diversified away by investing in both Barings Us and Us Global 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 Us Global 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 Us Global Investors, you can compare the effects of market volatilities on Barings Us and Us Global 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 Us Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Us Global.
Diversification Opportunities for Barings Us and Us Global
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and USLUX is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Us Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Global Investors 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 Us Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Global Investors has no effect on the direction of Barings Us i.e., Barings Us and Us Global go up and down completely randomly.
Pair Corralation between Barings Us and Us Global
Assuming the 90 days horizon Barings Us is expected to generate 11.26 times less return on investment than Us Global. But when comparing it to its historical volatility, Barings High Yield is 5.35 times less risky than Us Global. It trades about 0.22 of its potential returns per unit of risk. Us Global Investors is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,982 in Us Global Investors on November 3, 2024 and sell it today you would earn a total of 170.00 from holding Us Global Investors or generate 8.58% 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. Us Global Investors
Performance |
| Timeline |
| Barings High Yield |
| Us Global Investors |
Barings Us and Us Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Us Global
The main advantage of trading using opposite Barings Us and Us Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Us Global 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 Us Global will offset losses from the drop in Us Global'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 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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