Correlation Between Strategic Bond and Barings Active
Can any of the company-specific risk be diversified away by investing in both Strategic Bond 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 Strategic Bond and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Bond Fund and Barings Active Short, you can compare the effects of market volatilities on Strategic Bond 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 Strategic Bond with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Bond and Barings Active.
Diversification Opportunities for Strategic Bond and Barings Active
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Strategic and Barings is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Bond Fund 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 Strategic Bond 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 Strategic Bond Fund 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 Strategic Bond i.e., Strategic Bond and Barings Active go up and down completely randomly.
Pair Corralation between Strategic Bond and Barings Active
Assuming the 90 days horizon Strategic Bond Fund is expected to under-perform the Barings Active. In addition to that, Strategic Bond is 2.9 times more volatile than Barings Active Short. It trades about -0.1 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.11 per unit of volatility. If you would invest 922.00 in Barings Active Short on November 1, 2024 and sell it today you would earn a total of 4.00 from holding Barings Active Short or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Bond Fund vs. Barings Active Short
Performance |
| Timeline |
| Strategic Bond |
| Barings Active Short |
Strategic Bond and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Bond and Barings Active
The main advantage of trading using opposite Strategic Bond and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Bond 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.| Strategic Bond vs. Blackrock Global Longshort | Strategic Bond vs. Angel Oak Ultrashort | Strategic Bond vs. Cmg Ultra Short | Strategic Bond vs. Alpine Ultra Short |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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