Correlation Between NYSE Composite and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Barings Emerging Markets, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Barings Emerging.
Diversification Opportunities for NYSE Composite and Barings Emerging
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Barings is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Barings Emerging go up and down completely randomly.
Pair Corralation between NYSE Composite and Barings Emerging
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.79 times more return on investment than Barings Emerging. However, NYSE Composite is 1.79 times more volatile than Barings Emerging Markets. It trades about 0.14 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 1,612,304 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 408,678 from holding NYSE Composite or generate 25.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Barings Emerging Markets
Performance |
| Timeline |
NYSE Composite and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Barings Emerging Markets
Pair trading matchups for Barings Emerging
Pair Trading with NYSE Composite and Barings Emerging
The main advantage of trading using opposite NYSE Composite and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Barings Emerging vs. American Century Etf | Barings Emerging vs. Pace Smallmedium Value | Barings Emerging vs. Mutual Of America | Barings Emerging vs. Palm Valley Capital |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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