Correlation Between Quantitative and Barings Active
Can any of the company-specific risk be diversified away by investing in both Quantitative 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 Quantitative and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Barings Active Short, you can compare the effects of market volatilities on Quantitative 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 Quantitative with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative and Barings Active.
Diversification Opportunities for Quantitative and Barings Active
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Quantitative and Barings is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort 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 Quantitative 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 Quantitative Longshort 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 Quantitative i.e., Quantitative and Barings Active go up and down completely randomly.
Pair Corralation between Quantitative and Barings Active
Assuming the 90 days horizon Quantitative Longshort Equity is expected to generate 4.16 times more return on investment than Barings Active. However, Quantitative is 4.16 times more volatile than Barings Active Short. It trades about 0.39 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.08 per unit of risk. If you would invest 1,405 in Quantitative Longshort Equity on August 28, 2024 and sell it today you would earn a total of 64.00 from holding Quantitative Longshort Equity or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Barings Active Short
Performance |
| Timeline |
| Quantitative Longshort |
| Barings Active Short |
Quantitative and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative and Barings Active
The main advantage of trading using opposite Quantitative and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative 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.| Quantitative vs. Morgan Stanley Institutional | Quantitative vs. Ab Value Fund | Quantitative vs. Omni Small Cap Value | Quantitative vs. Small Cap Stock |
| Barings Active vs. Versatile Bond Portfolio | Barings Active vs. Nuveen Minnesota Municipal | Barings Active vs. Ishares Municipal Bond | Barings Active vs. Multisector Bond Sma |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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