Correlation Between Glg Intl and Barings Active
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Barings Active 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 Glg Intl and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glg Intl Small and Barings Active Short, you can compare the effects of market volatilities on Glg Intl and Barings Active 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 Glg Intl with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Barings Active.
Diversification Opportunities for Glg Intl and Barings Active
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glg and Barings is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short and Glg Intl 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 Glg Intl Small are associated (or correlated) with Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Glg Intl i.e., Glg Intl and Barings Active go up and down completely randomly.
Pair Corralation between Glg Intl and Barings Active
Assuming the 90 days horizon Glg Intl Small is expected to generate 11.09 times more return on investment than Barings Active. However, Glg Intl is 11.09 times more volatile than Barings Active Short. It trades about 0.26 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.14 per unit of risk. If you would invest 8,535 in Glg Intl Small on November 6, 2024 and sell it today you would earn a total of 378.00 from holding Glg Intl Small or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glg Intl Small vs. Barings Active Short
Performance |
| Timeline |
| Glg Intl Small |
| Barings Active Short |
Glg Intl and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and Barings Active
The main advantage of trading using opposite Glg Intl and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Barings Active 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 Active will offset losses from the drop in Barings Active's long position.| Glg Intl vs. Short Duration Inflation | Glg Intl vs. The Hartford Inflation | Glg Intl vs. Cref Inflation Linked Bond | Glg Intl vs. Abbey Capital Futures |
| Barings Active vs. Schwab Government Money | Barings Active vs. Blackrock Financial Institutions | Barings Active vs. Chestnut Street Exchange | Barings Active vs. Goldman Sachs Financial |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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