Correlation Between Horizon Funds and Barings Active
Can any of the company-specific risk be diversified away by investing in both Horizon Funds 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 Horizon Funds and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Funds and Barings Active Short, you can compare the effects of market volatilities on Horizon Funds 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 Horizon Funds with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Funds and Barings Active.
Diversification Opportunities for Horizon Funds and Barings Active
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Horizon and Barings is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Funds 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 Horizon Funds 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 Horizon Funds 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 Horizon Funds i.e., Horizon Funds and Barings Active go up and down completely randomly.
Pair Corralation between Horizon Funds and Barings Active
Assuming the 90 days horizon Horizon Funds is expected to generate 1.79 times more return on investment than Barings Active. However, Horizon Funds is 1.79 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 0.15 per unit of risk. If you would invest 4,828 in Horizon Funds on August 31, 2024 and sell it today you would earn a total of 66.00 from holding Horizon Funds or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Funds vs. Barings Active Short
Performance |
| Timeline |
| Horizon Funds |
| Barings Active Short |
Horizon Funds and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Funds and Barings Active
The main advantage of trading using opposite Horizon Funds and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Funds 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.| Horizon Funds vs. Barings Active Short | Horizon Funds vs. Astor Longshort Fund | Horizon Funds vs. Goldman Sachs Short Term | Horizon Funds vs. The Short Term |
| Barings Active vs. Blrc Sgy Mnp | Barings Active vs. Ab Impact Municipal | Barings Active vs. Artisan High Income | Barings Active vs. Maryland Tax Free Bond |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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