Correlation Between Equity Growth and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Equity Growth 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 Equity Growth and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Growth Strategy and Barings Emerging Markets, you can compare the effects of market volatilities on Equity Growth 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 Equity Growth with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Growth and Barings Emerging.
Diversification Opportunities for Equity Growth and Barings Emerging
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Equity and Barings is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Equity Growth Strategy 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 Equity Growth 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 Equity Growth Strategy 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 Equity Growth i.e., Equity Growth and Barings Emerging go up and down completely randomly.
Pair Corralation between Equity Growth and Barings Emerging
Assuming the 90 days horizon Equity Growth Strategy is expected to generate 1.64 times more return on investment than Barings Emerging. However, Equity Growth is 1.64 times more volatile than Barings Emerging Markets. It trades about 0.33 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 1,574 in Equity Growth Strategy on September 1, 2024 and sell it today you would earn a total of 62.00 from holding Equity Growth Strategy or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Equity Growth Strategy vs. Barings Emerging Markets
Performance |
| Timeline |
| Equity Growth Strategy |
| Barings Emerging Markets |
Equity Growth and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Growth and Barings Emerging
The main advantage of trading using opposite Equity Growth and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Growth 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.| Equity Growth vs. American Century High | Equity Growth vs. Prudential Short Duration | Equity Growth vs. Multi Manager High Yield | Equity Growth vs. Valic Company I |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |