Correlation Between Barings Participation and CBH
Can any of the company-specific risk be diversified away by investing in both Barings Participation and CBH 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 Barings Participation and CBH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Participation Investors and CBH, you can compare the effects of market volatilities on Barings Participation and CBH 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 Barings Participation with a short position of CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Participation and CBH.
Diversification Opportunities for Barings Participation and CBH
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and CBH is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Barings Participation Investor and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Barings Participation 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 Barings Participation Investors are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Barings Participation i.e., Barings Participation and CBH go up and down completely randomly.
Pair Corralation between Barings Participation and CBH
Considering the 90-day investment horizon Barings Participation Investors is expected to generate 3.64 times more return on investment than CBH. However, Barings Participation is 3.64 times more volatile than CBH. It trades about 0.08 of its potential returns per unit of risk. CBH is currently generating about 0.16 per unit of risk. If you would invest 1,421 in Barings Participation Investors on August 28, 2024 and sell it today you would earn a total of 227.00 from holding Barings Participation Investors or generate 15.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 71.29% |
| Values | Daily Returns |
Barings Participation Investor vs. CBH
Performance |
| Timeline |
| Barings Participation |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Barings Participation and CBH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Participation and CBH
The main advantage of trading using opposite Barings Participation and CBH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Participation position performs unexpectedly, CBH 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 CBH will offset losses from the drop in CBH's long position.| Barings Participation vs. Allianzgi Equity Convertible | Barings Participation vs. Cohen Steers Total | Barings Participation vs. Blackrock Floating Rate | Barings Participation vs. MFS Investment Grade |
| CBH vs. Eaton Vance National | CBH vs. Invesco High Income | CBH vs. Blackrock Muniholdings Ny | CBH vs. Nuveen California Select |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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