Correlation Between Frost Credit and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Frost Credit and Barings Emerging 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 Frost Credit and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frost Credit Fund and Barings Emerging Markets, you can compare the effects of market volatilities on Frost Credit and Barings Emerging 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 Frost Credit with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frost Credit and Barings Emerging.
Diversification Opportunities for Frost Credit and Barings Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Frost and Barings is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Frost Credit Fund and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets and Frost Credit 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 Frost Credit Fund are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Frost Credit i.e., Frost Credit and Barings Emerging go up and down completely randomly.
Pair Corralation between Frost Credit and Barings Emerging
If you would invest 657.00 in Barings Emerging Markets on November 30, 2024 and sell it today you would earn a total of 101.00 from holding Barings Emerging Markets or generate 15.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.2% |
| Values | Daily Returns |
Frost Credit Fund vs. Barings Emerging Markets
Performance |
| Timeline |
| Frost Credit |
Risk-Adjusted Performance
Modest
Weak | Strong |
| Barings Emerging Markets |
Frost Credit and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frost Credit and Barings Emerging
The main advantage of trading using opposite Frost Credit and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frost Credit position performs unexpectedly, Barings Emerging 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 Emerging will offset losses from the drop in Barings Emerging's long position.| Frost Credit vs. Us Government Securities | Frost Credit vs. Old Westbury Municipal | Frost Credit vs. Intermediate Term Tax Free Bond | Frost Credit vs. Prudential California Muni |
| Barings Emerging vs. Franklin Adjustable Government | Barings Emerging vs. Lord Abbett Intermediate | Barings Emerging vs. Us Government Securities | Barings Emerging vs. Us Government Securities |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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