Correlation Between BARINGS EASTERN and BARINGS LATIN
Can any of the company-specific risk be diversified away by investing in both BARINGS EASTERN and BARINGS LATIN 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 EASTERN and BARINGS LATIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BARINGS EASTERN EUROPE and BARINGS LATIN AMERICA, you can compare the effects of market volatilities on BARINGS EASTERN and BARINGS LATIN 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 EASTERN with a short position of BARINGS LATIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of BARINGS EASTERN and BARINGS LATIN.
Diversification Opportunities for BARINGS EASTERN and BARINGS LATIN
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BARINGS and BARINGS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding BARINGS EASTERN EUROPE and BARINGS LATIN AMERICA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BARINGS LATIN AMERICA and BARINGS EASTERN 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 EASTERN EUROPE are associated (or correlated) with BARINGS LATIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BARINGS LATIN AMERICA has no effect on the direction of BARINGS EASTERN i.e., BARINGS EASTERN and BARINGS LATIN go up and down completely randomly.
Pair Corralation between BARINGS EASTERN and BARINGS LATIN
Assuming the 90 days trading horizon BARINGS EASTERN EUROPE is expected to generate 0.72 times more return on investment than BARINGS LATIN. However, BARINGS EASTERN EUROPE is 1.39 times less risky than BARINGS LATIN. It trades about 0.19 of its potential returns per unit of risk. BARINGS LATIN AMERICA is currently generating about 0.0 per unit of risk. If you would invest 3,784 in BARINGS EASTERN EUROPE on September 3, 2024 and sell it today you would earn a total of 147.00 from holding BARINGS EASTERN EUROPE or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BARINGS EASTERN EUROPE vs. BARINGS LATIN AMERICA
Performance |
| Timeline |
| BARINGS EASTERN EUROPE |
| BARINGS LATIN AMERICA |
BARINGS EASTERN and BARINGS LATIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BARINGS EASTERN and BARINGS LATIN
The main advantage of trading using opposite BARINGS EASTERN and BARINGS LATIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BARINGS EASTERN position performs unexpectedly, BARINGS LATIN 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 BARINGS LATIN will offset losses from the drop in BARINGS LATIN's long position.| BARINGS EASTERN vs. BARINGS LATIN AMERICA | BARINGS EASTERN vs. Esfera Robotics R | BARINGS EASTERN vs. R co Valor F | BARINGS EASTERN vs. CM AM Monplus NE |
| BARINGS LATIN vs. Groupama Entreprises N | BARINGS LATIN vs. Renaissance Europe C | BARINGS LATIN vs. Superior Plus Corp | BARINGS LATIN vs. Origin Agritech |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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