Correlation Between Metropolitan West and Barings Us
Can any of the company-specific risk be diversified away by investing in both Metropolitan West and Barings Us 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 Metropolitan West and Barings Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan West High and Barings High Yield, you can compare the effects of market volatilities on Metropolitan West and Barings Us 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 Metropolitan West with a short position of Barings Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan West and Barings Us.
Diversification Opportunities for Metropolitan West and Barings Us
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Metropolitan and Barings is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan West High and Barings High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings High Yield and Metropolitan West 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 Metropolitan West High are associated (or correlated) with Barings Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings High Yield has no effect on the direction of Metropolitan West i.e., Metropolitan West and Barings Us go up and down completely randomly.
Pair Corralation between Metropolitan West and Barings Us
Assuming the 90 days horizon Metropolitan West is expected to generate 1.63 times less return on investment than Barings Us. In addition to that, Metropolitan West is 1.0 times more volatile than Barings High Yield. It trades about 0.21 of its total potential returns per unit of risk. Barings High Yield is currently generating about 0.34 per unit of volatility. If you would invest 806.00 in Barings High Yield on October 26, 2024 and sell it today you would earn a total of 10.00 from holding Barings High Yield or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan West High vs. Barings High Yield
Performance |
| Timeline |
| Metropolitan West High |
| Barings High Yield |
Metropolitan West and Barings Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan West and Barings Us
The main advantage of trading using opposite Metropolitan West and Barings Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan West position performs unexpectedly, Barings Us 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 Us will offset losses from the drop in Barings Us' long position.| Metropolitan West vs. Federated Total Return | Metropolitan West vs. Global Bond Fund | Metropolitan West vs. Government Bond Fund | Metropolitan West vs. Aberdeen Global High |
| Barings Us vs. Rbc Ultra Short Fixed | Barings Us vs. Bbh Intermediate Municipal | Barings Us vs. Dreyfusstandish Global Fixed | Barings Us vs. T Rowe Price |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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