Correlation Between Jennison Natural and Barings Global
Can any of the company-specific risk be diversified away by investing in both Jennison Natural 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 Jennison Natural and Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jennison Natural Resources and Barings Global Credit, you can compare the effects of market volatilities on Jennison Natural 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 Jennison Natural with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jennison Natural and Barings Global.
Diversification Opportunities for Jennison Natural and Barings Global
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jennison and Barings is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jennison Natural Resources 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 Jennison Natural 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 Jennison Natural Resources 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 Jennison Natural i.e., Jennison Natural and Barings Global go up and down completely randomly.
Pair Corralation between Jennison Natural and Barings Global
Assuming the 90 days horizon Jennison Natural Resources is expected to under-perform the Barings Global. In addition to that, Jennison Natural is 8.69 times more volatile than Barings Global Credit. It trades about -0.09 of its total potential returns per unit of risk. Barings Global Credit is currently generating about 0.31 per unit of volatility. If you would invest 768.00 in Barings Global Credit on November 29, 2024 and sell it today you would earn a total of 8.00 from holding Barings Global Credit or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jennison Natural Resources vs. Barings Global Credit
Performance |
| Timeline |
| Jennison Natural Res |
| Barings Global Credit |
Jennison Natural and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jennison Natural and Barings Global
The main advantage of trading using opposite Jennison Natural and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jennison Natural 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.| Jennison Natural vs. Us Government Securities | Jennison Natural vs. Blackrock Government Bond | Jennison Natural vs. Franklin Adjustable Government | Jennison Natural vs. Virtus Seix Government |
| Barings Global vs. Prudential Real Estate | Barings Global vs. Global Real Estate | Barings Global vs. Neuberger Berman Real | Barings Global vs. Nomura Real Estate |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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