Correlation Between Pax High and Barings Active
Can any of the company-specific risk be diversified away by investing in both Pax High 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 Pax High and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pax High Yield and Barings Active Short, you can compare the effects of market volatilities on Pax High 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 Pax High with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pax High and Barings Active.
Diversification Opportunities for Pax High and Barings Active
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pax and Barings is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pax High Yield 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 Pax High 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 Pax High Yield 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 Pax High i.e., Pax High and Barings Active go up and down completely randomly.
Pair Corralation between Pax High and Barings Active
Assuming the 90 days horizon Pax High Yield is expected to generate 1.33 times more return on investment than Barings Active. However, Pax High is 1.33 times more volatile than Barings Active Short. It trades about 0.28 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.18 per unit of risk. If you would invest 609.00 in Pax High Yield on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Pax High Yield or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pax High Yield vs. Barings Active Short
Performance |
| Timeline |
| Pax High Yield |
| Barings Active Short |
Pax High and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pax High and Barings Active
The main advantage of trading using opposite Pax High and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pax High 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.| Pax High vs. Pax E Bond | Pax High vs. Pax Global Environmental | Pax High vs. Pax Esg Beta | Pax High vs. Pax Global Opportunities |
| Barings Active vs. Champlain Small | Barings Active vs. Franklin Small Cap | Barings Active vs. Touchstone Small Cap | Barings Active vs. Df Dent Small |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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