Correlation Between Great-west Core and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Great-west Core 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 Great-west Core and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West E Strategies and Barings Emerging Markets, you can compare the effects of market volatilities on Great-west Core 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 Great-west Core with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Core and Barings Emerging.
Diversification Opportunities for Great-west Core and Barings Emerging
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great-west and Barings is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Great West E Strategies 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 Great-west Core 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 E Strategies 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 Great-west Core i.e., Great-west Core and Barings Emerging go up and down completely randomly.
Pair Corralation between Great-west Core and Barings Emerging
Assuming the 90 days horizon Great West E Strategies is expected to generate 0.46 times more return on investment than Barings Emerging. However, Great West E Strategies is 2.15 times less risky than Barings Emerging. It trades about 0.18 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 374.00 in Great West E Strategies on September 5, 2024 and sell it today you would earn a total of 2.00 from holding Great West E Strategies or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Great West E Strategies vs. Barings Emerging Markets
Performance |
| Timeline |
| Great-west Core |
| Barings Emerging Markets |
Great-west Core and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-west Core and Barings Emerging
The main advantage of trading using opposite Great-west Core and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west Core 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.| Great-west Core vs. Barings Emerging Markets | Great-west Core vs. Templeton Developing Markets | Great-west Core vs. The Hartford Emerging | Great-west Core vs. Massmutual Select Diversified |
| Barings Emerging vs. Small Cap Stock | Barings Emerging vs. Commodities Strategy Fund | Barings Emerging vs. Growth Strategy Fund | Barings Emerging vs. Omni Small Cap Value |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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