Correlation Between Longleaf Partners and Barings Global
Can any of the company-specific risk be diversified away by investing in both Longleaf Partners 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 Longleaf Partners and Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longleaf Partners Fund and Barings Global Floating, you can compare the effects of market volatilities on Longleaf Partners 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 Longleaf Partners with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longleaf Partners and Barings Global.
Diversification Opportunities for Longleaf Partners and Barings Global
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Longleaf and Barings is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Longleaf Partners Fund 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 Longleaf Partners 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 Longleaf Partners Fund 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 Longleaf Partners i.e., Longleaf Partners and Barings Global go up and down completely randomly.
Pair Corralation between Longleaf Partners and Barings Global
Assuming the 90 days horizon Longleaf Partners Fund is expected to generate 5.72 times more return on investment than Barings Global. However, Longleaf Partners is 5.72 times more volatile than Barings Global Floating. It trades about 0.17 of its potential returns per unit of risk. Barings Global Floating is currently generating about 0.21 per unit of risk. If you would invest 2,395 in Longleaf Partners Fund on August 31, 2024 and sell it today you would earn a total of 168.00 from holding Longleaf Partners Fund or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longleaf Partners Fund vs. Barings Global Floating
Performance |
| Timeline |
| Longleaf Partners |
| Barings Global Floating |
Longleaf Partners and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longleaf Partners and Barings Global
The main advantage of trading using opposite Longleaf Partners and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longleaf Partners 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.| Longleaf Partners vs. Nuveen Arizona Municipal | Longleaf Partners vs. Alliancebernstein National Municipal | Longleaf Partners vs. Nuveen Minnesota Municipal | Longleaf Partners vs. Blrc Sgy Mnp |
| Barings Global vs. Jennison Natural Resources | Barings Global vs. Ivy Energy Fund | Barings Global vs. World Energy Fund | Barings Global vs. Oil Gas Ultrasector |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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