Correlation Between Arrow Managed and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Barings Emerging 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 Arrow Managed and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Barings Emerging Markets, you can compare the effects of market volatilities on Arrow Managed and Barings Emerging 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 Arrow Managed with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Barings Emerging.
Diversification Opportunities for Arrow Managed and Barings Emerging
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Arrow and Barings is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets and Arrow Managed 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 Arrow Managed Futures are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Arrow Managed i.e., Arrow Managed and Barings Emerging go up and down completely randomly.
Pair Corralation between Arrow Managed and Barings Emerging
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 3.71 times more return on investment than Barings Emerging. However, Arrow Managed is 3.71 times more volatile than Barings Emerging Markets. It trades about 0.25 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 525.00 in Arrow Managed Futures on September 1, 2024 and sell it today you would earn a total of 33.00 from holding Arrow Managed Futures or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Barings Emerging Markets
Performance |
| Timeline |
| Arrow Managed Futures |
| Barings Emerging Markets |
Arrow Managed and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Barings Emerging
The main advantage of trading using opposite Arrow Managed and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Barings Emerging 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 Emerging will offset losses from the drop in Barings Emerging's long position.| Arrow Managed vs. Arrow Dwa Tactical | Arrow Managed vs. Arrow Dwa Tactical | Arrow Managed vs. Vanguard 500 Index | Arrow Managed vs. Allspring Global Dividend |
| Barings Emerging vs. Artisan High Income | Barings Emerging vs. Federated Ohio Municipal | Barings Emerging vs. Versatile Bond Portfolio | Barings Emerging vs. Ambrus Core 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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