Correlation Between Aquila Tax-free and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Aquila Tax-free 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 Aquila Tax-free and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquila Tax Free Trust and Barings Emerging Markets, you can compare the effects of market volatilities on Aquila Tax-free 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 Aquila Tax-free with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquila Tax-free and Barings Emerging.
Diversification Opportunities for Aquila Tax-free and Barings Emerging
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aquila and Barings is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aquila Tax Free Trust 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 Aquila Tax-free 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 Aquila Tax Free Trust 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 Aquila Tax-free i.e., Aquila Tax-free and Barings Emerging go up and down completely randomly.
Pair Corralation between Aquila Tax-free and Barings Emerging
Assuming the 90 days horizon Aquila Tax Free Trust is expected to generate 0.78 times more return on investment than Barings Emerging. However, Aquila Tax Free Trust is 1.29 times less risky than Barings Emerging. It trades about 0.14 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 1,023 in Aquila Tax Free Trust on August 29, 2024 and sell it today you would earn a total of 8.00 from holding Aquila Tax Free Trust or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquila Tax Free Trust vs. Barings Emerging Markets
Performance |
| Timeline |
| Aquila Tax Free |
| Barings Emerging Markets |
Aquila Tax-free and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquila Tax-free and Barings Emerging
The main advantage of trading using opposite Aquila Tax-free and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquila Tax-free 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.| Aquila Tax-free vs. Barings Emerging Markets | Aquila Tax-free vs. Vanguard Emerging Markets | Aquila Tax-free vs. Touchstone Sands Capital | Aquila Tax-free vs. Angel Oak Multi Strategy |
| Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. HUMANA INC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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