Correlation Between Edge Midcap and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Edge Midcap 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 Edge Midcap and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edge Midcap Fund and Barings Emerging Markets, you can compare the effects of market volatilities on Edge Midcap 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 Edge Midcap with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edge Midcap and Barings Emerging.
Diversification Opportunities for Edge Midcap and Barings Emerging
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Edge and Barings is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Edge Midcap Fund 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 Edge Midcap 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 Edge Midcap Fund 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 Edge Midcap i.e., Edge Midcap and Barings Emerging go up and down completely randomly.
Pair Corralation between Edge Midcap and Barings Emerging
Assuming the 90 days horizon Edge Midcap Fund is expected to generate 2.74 times more return on investment than Barings Emerging. However, Edge Midcap is 2.74 times more volatile than Barings Emerging Markets. It trades about 0.39 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 1,327 in Edge Midcap Fund on September 1, 2024 and sell it today you would earn a total of 98.00 from holding Edge Midcap Fund or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edge Midcap Fund vs. Barings Emerging Markets
Performance |
| Timeline |
| Edge Midcap Fund |
| Barings Emerging Markets |
Edge Midcap and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edge Midcap and Barings Emerging
The main advantage of trading using opposite Edge Midcap and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edge Midcap 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.| Edge Midcap vs. Barings Emerging Markets | Edge Midcap vs. Calvert Emerging Markets | Edge Midcap vs. Siit Emerging Markets | Edge Midcap vs. Goldman Sachs Emerging |
| Barings Emerging vs. Artisan High Income | Barings Emerging vs. Federated Ohio Municipal | Barings Emerging vs. Versatile Bond Portfolio | Barings Emerging vs. Ambrus Core Bond |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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