Correlation Between Pear Tree and Barings Us
Can any of the company-specific risk be diversified away by investing in both Pear Tree and Barings Us 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 Pear Tree and Barings Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pear Tree Polaris and Barings High Yield, you can compare the effects of market volatilities on Pear Tree and Barings Us 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 Pear Tree with a short position of Barings Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pear Tree and Barings Us.
Diversification Opportunities for Pear Tree and Barings Us
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pear and Barings is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Pear Tree Polaris and Barings High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings High Yield and Pear Tree 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 Pear Tree Polaris are associated (or correlated) with Barings Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings High Yield has no effect on the direction of Pear Tree i.e., Pear Tree and Barings Us go up and down completely randomly.
Pair Corralation between Pear Tree and Barings Us
Assuming the 90 days horizon Pear Tree is expected to generate 7.35 times less return on investment than Barings Us. In addition to that, Pear Tree is 3.57 times more volatile than Barings High Yield. It trades about 0.01 of its total potential returns per unit of risk. Barings High Yield is currently generating about 0.18 per unit of volatility. If you would invest 747.00 in Barings High Yield on November 3, 2024 and sell it today you would earn a total of 69.00 from holding Barings High Yield or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pear Tree Polaris vs. Barings High Yield
Performance |
| Timeline |
| Pear Tree Polaris |
| Barings High Yield |
Pear Tree and Barings Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pear Tree and Barings Us
The main advantage of trading using opposite Pear Tree and Barings Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pear Tree position performs unexpectedly, Barings Us 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 Us will offset losses from the drop in Barings Us' long position.| Pear Tree vs. Sp Smallcap 600 | Pear Tree vs. Small Pany Growth | Pear Tree vs. Artisan Small Cap | Pear Tree vs. Sp Smallcap 600 |
| Barings Us vs. Glg Intl Small | Barings Us vs. Gmo Quality Fund | Barings Us vs. Commonwealth Global Fund | Barings Us vs. Barings Active Short |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |