Correlation Between Great West and Barings Global
Can any of the company-specific risk be diversified away by investing in both Great West 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 Great West and Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Lifetime 2050 and Barings Global Floating, you can compare the effects of market volatilities on Great West 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 Great West with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Barings Global.
Diversification Opportunities for Great West and Barings Global
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and Barings is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifetime 2050 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 Great 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 Great West Lifetime 2050 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 Great West i.e., Great West and Barings Global go up and down completely randomly.
Pair Corralation between Great West and Barings Global
Assuming the 90 days horizon Great West Lifetime 2050 is expected to generate 4.16 times more return on investment than Barings Global. However, Great West is 4.16 times more volatile than Barings Global Floating. It trades about 0.07 of its potential returns per unit of risk. Barings Global Floating is currently generating about 0.2 per unit of risk. If you would invest 1,079 in Great West Lifetime 2050 on September 12, 2024 and sell it today you would earn a total of 140.00 from holding Great West Lifetime 2050 or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Lifetime 2050 vs. Barings Global Floating
Performance |
| Timeline |
| Great West Lifetime |
| Barings Global Floating |
Great West and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Barings Global
The main advantage of trading using opposite Great West and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West 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.| Great West vs. Barings Global Floating | Great West vs. 361 Global Longshort | Great West vs. Jhancock Global Equity | Great West vs. Morningstar Global Income |
| Barings Global vs. Janus High Yield Fund | Barings Global vs. Buffalo High Yield | Barings Global vs. Pace High Yield | Barings Global vs. Msift High Yield |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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