Correlation Between Growth Portfolio and Barings Active
Can any of the company-specific risk be diversified away by investing in both Growth Portfolio 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 Growth Portfolio and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Portfolio Class and Barings Active Short, you can compare the effects of market volatilities on Growth Portfolio 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 Growth Portfolio with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Portfolio and Barings Active.
Diversification Opportunities for Growth Portfolio and Barings Active
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and Barings is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Growth Portfolio Class 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 Growth Portfolio 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 Growth Portfolio Class 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 Growth Portfolio i.e., Growth Portfolio and Barings Active go up and down completely randomly.
Pair Corralation between Growth Portfolio and Barings Active
Assuming the 90 days horizon Growth Portfolio Class is expected to generate 12.38 times more return on investment than Barings Active. However, Growth Portfolio is 12.38 times more volatile than Barings Active Short. It trades about 0.14 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.18 per unit of risk. If you would invest 2,742 in Growth Portfolio Class on August 29, 2024 and sell it today you would earn a total of 1,640 from holding Growth Portfolio Class or generate 59.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Growth Portfolio Class vs. Barings Active Short
Performance |
| Timeline |
| Growth Portfolio Class |
| Barings Active Short |
Growth Portfolio and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Portfolio and Barings Active
The main advantage of trading using opposite Growth Portfolio and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Portfolio 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.| Growth Portfolio vs. Alphacentric Lifesci Healthcare | Growth Portfolio vs. Fidelity Advisor Health | Growth Portfolio vs. Lord Abbett Health | Growth Portfolio vs. Health Care Fund |
| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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