Correlation Between Large Cap and Barings Global
Can any of the company-specific risk be diversified away by investing in both Large Cap 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 Large Cap and Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Growth and Barings Global Floating, you can compare the effects of market volatilities on Large Cap 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 Large Cap with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large Cap and Barings Global.
Diversification Opportunities for Large Cap and Barings Global
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Large and Barings is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth 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 Large Cap 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 Large Cap Growth 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 Large Cap i.e., Large Cap and Barings Global go up and down completely randomly.
Pair Corralation between Large Cap and Barings Global
Assuming the 90 days horizon Large Cap Growth is expected to generate 5.85 times more return on investment than Barings Global. However, Large Cap is 5.85 times more volatile than Barings Global Floating. It trades about 0.09 of its potential returns per unit of risk. Barings Global Floating is currently generating about 0.22 per unit of risk. If you would invest 2,723 in Large Cap Growth on September 4, 2024 and sell it today you would earn a total of 1,100 from holding Large Cap Growth or generate 40.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Large Cap Growth vs. Barings Global Floating
Performance |
| Timeline |
| Large Cap Growth |
| Barings Global Floating |
Large Cap and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large Cap and Barings Global
The main advantage of trading using opposite Large Cap and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large Cap 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.| Large Cap vs. Heartland Value Plus | Large Cap vs. Ultrasmall Cap Profund Ultrasmall Cap | Large Cap vs. Boston Partners Small | Large Cap vs. American Century Etf |
| Barings Global vs. Dreyfusstandish Global Fixed | Barings Global vs. Morningstar Global Income | Barings Global vs. Franklin Mutual Global | Barings Global vs. Ab Global Real |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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