Correlation Between Sp 500 and Barings Global
Can any of the company-specific risk be diversified away by investing in both Sp 500 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 Sp 500 and Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp 500 2x and Barings Global Floating, you can compare the effects of market volatilities on Sp 500 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 Sp 500 with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp 500 and Barings Global.
Diversification Opportunities for Sp 500 and Barings Global
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RYCTX and Barings is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sp 500 2x and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating and Sp 500 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 Sp 500 2x 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 Floating has no effect on the direction of Sp 500 i.e., Sp 500 and Barings Global go up and down completely randomly.
Pair Corralation between Sp 500 and Barings Global
Assuming the 90 days horizon Sp 500 2x is expected to generate 15.76 times more return on investment than Barings Global. However, Sp 500 is 15.76 times more volatile than Barings Global Floating. It trades about 0.16 of its potential returns per unit of risk. Barings Global Floating is currently generating about 0.34 per unit of risk. If you would invest 27,387 in Sp 500 2x on August 31, 2024 and sell it today you would earn a total of 1,606 from holding Sp 500 2x or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp 500 2x vs. Barings Global Floating
Performance |
| Timeline |
| Sp 500 2x |
| Barings Global Floating |
Sp 500 and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp 500 and Barings Global
The main advantage of trading using opposite Sp 500 and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp 500 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.| Sp 500 vs. Vanguard Small Cap Growth | Sp 500 vs. Omni Small Cap Value | Sp 500 vs. Issachar Fund Class | Sp 500 vs. Shelton Funds |
| Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Floating Rate Fund | Barings Global vs. Floating Rate Fund | Barings Global vs. Floating Rate Fund |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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