Correlation Between Gmo International and Barings Active
Can any of the company-specific risk be diversified away by investing in both Gmo International 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 Gmo International and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo International Equity and Barings Active Short, you can compare the effects of market volatilities on Gmo International 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 Gmo International with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo International and Barings Active.
Diversification Opportunities for Gmo International and Barings Active
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gmo and Barings is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Gmo International Equity 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 Gmo International 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 Gmo International Equity 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 Gmo International i.e., Gmo International and Barings Active go up and down completely randomly.
Pair Corralation between Gmo International and Barings Active
Assuming the 90 days horizon Gmo International Equity is expected to under-perform the Barings Active. In addition to that, Gmo International is 7.8 times more volatile than Barings Active Short. It trades about -0.02 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.09 per unit of volatility. If you would invest 923.00 in Barings Active Short on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Barings Active Short or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo International Equity vs. Barings Active Short
Performance |
| Timeline |
| Gmo International Equity |
| Barings Active Short |
Gmo International and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo International and Barings Active
The main advantage of trading using opposite Gmo International and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo International 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.| Gmo International vs. Ab Select Longshort | Gmo International vs. Barings Active Short | Gmo International vs. Astor Longshort Fund | Gmo International vs. Jhancock Short Duration |
| Barings Active vs. Ab Bond Inflation | Barings Active vs. Western Asset Inflation | Barings Active vs. Blackrock Inflation Protected | Barings Active vs. Aqr Managed Futures |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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