Correlation Between NYSE Composite and Barings Global
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Barings Global 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 Global Credit, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Barings Global.
Diversification Opportunities for NYSE Composite and Barings Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Barings is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Barings Global Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Credit 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 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 Credit has no effect on the direction of NYSE Composite i.e., NYSE Composite and Barings Global go up and down completely randomly.
Pair Corralation between NYSE Composite and Barings Global
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.08 times more return on investment than Barings Global. However, NYSE Composite is 4.08 times more volatile than Barings Global Credit. It trades about 0.15 of its potential returns per unit of risk. Barings Global Credit is currently generating about 0.17 per unit of risk. If you would invest 1,793,449 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 233,755 from holding NYSE Composite or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Barings Global Credit
Performance |
| Timeline |
NYSE Composite and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Barings Global Credit
Pair trading matchups for Barings Global
Pair Trading with NYSE Composite and Barings Global
The main advantage of trading using opposite NYSE Composite and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Barings Global vs. Needham Aggressive Growth | Barings Global vs. Metropolitan West High | Barings Global vs. Legg Mason Partners | Barings Global vs. Aqr Risk Balanced Modities |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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