Correlation Between Ab Global and Barings Global
Can any of the company-specific risk be diversified away by investing in both Ab Global and Barings 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 Ab Global and Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Barings Global Floating, you can compare the effects of market volatilities on Ab Global and Barings 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 Ab Global with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Barings Global.
Diversification Opportunities for Ab Global and Barings Global
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CABIX and Barings is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating and Ab Global 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 Ab Global Risk are associated (or correlated) with Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Floating has no effect on the direction of Ab Global i.e., Ab Global and Barings Global go up and down completely randomly.
Pair Corralation between Ab Global and Barings Global
Assuming the 90 days horizon Ab Global is expected to generate 2.29 times less return on investment than Barings Global. In addition to that, Ab Global is 4.03 times more volatile than Barings Global Floating. It trades about 0.03 of its total potential returns per unit of risk. Barings Global Floating is currently generating about 0.3 per unit of volatility. If you would invest 871.00 in Barings Global Floating on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Barings Global Floating or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Barings Global Floating
Performance |
| Timeline |
| Ab Global Risk |
| Barings Global Floating |
Ab Global and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Barings Global
The main advantage of trading using opposite Ab Global and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Barings 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 Barings Global will offset losses from the drop in Barings Global's long position.| Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Minnesota Portfolio |
| Barings Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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