Correlation Between Prudential Government and Barings Active
Can any of the company-specific risk be diversified away by investing in both Prudential Government and Barings Active 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 Prudential Government and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Government Income and Barings Active Short, you can compare the effects of market volatilities on Prudential Government and Barings Active 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 Prudential Government with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Government and Barings Active.
Diversification Opportunities for Prudential Government and Barings Active
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prudential and Barings is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Government Income and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short and Prudential Government 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 Prudential Government Income are associated (or correlated) with Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Prudential Government i.e., Prudential Government and Barings Active go up and down completely randomly.
Pair Corralation between Prudential Government and Barings Active
Assuming the 90 days horizon Prudential Government is expected to generate 1.93 times less return on investment than Barings Active. In addition to that, Prudential Government is 2.69 times more volatile than Barings Active Short. It trades about 0.04 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.19 per unit of volatility. If you would invest 832.00 in Barings Active Short on September 2, 2024 and sell it today you would earn a total of 93.00 from holding Barings Active Short or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Government Income vs. Barings Active Short
Performance |
| Timeline |
| Prudential Government |
| Barings Active Short |
Prudential Government and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Government and Barings Active
The main advantage of trading using opposite Prudential Government and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Government position performs unexpectedly, Barings Active 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 Active will offset losses from the drop in Barings Active's long position.| Prudential Government vs. Shelton Emerging Markets | Prudential Government vs. Pace International Emerging | Prudential Government vs. Pnc Emerging Markets | Prudential Government vs. Siit Emerging Markets |
| Barings Active vs. Calamos Dynamic Convertible | Barings Active vs. Ab Bond Inflation | Barings Active vs. Blrc Sgy Mnp | Barings Active vs. Artisan High Income |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |