Correlation Between Inverse Emerging and Barings Active
Can any of the company-specific risk be diversified away by investing in both Inverse Emerging 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 Inverse Emerging and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Emerging Markets and Barings Active Short, you can compare the effects of market volatilities on Inverse Emerging 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 Inverse Emerging with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Emerging and Barings Active.
Diversification Opportunities for Inverse Emerging and Barings Active
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Inverse and Barings is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Emerging Markets 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 Inverse Emerging 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 Inverse Emerging Markets 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 Inverse Emerging i.e., Inverse Emerging and Barings Active go up and down completely randomly.
Pair Corralation between Inverse Emerging and Barings Active
Assuming the 90 days horizon Inverse Emerging Markets is expected to under-perform the Barings Active. In addition to that, Inverse Emerging is 15.55 times more volatile than Barings Active Short. It trades about 0.0 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.14 per unit of volatility. If you would invest 825.00 in Barings Active Short on October 18, 2024 and sell it today you would earn a total of 98.00 from holding Barings Active Short or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Emerging Markets vs. Barings Active Short
Performance |
| Timeline |
| Inverse Emerging Markets |
| Barings Active Short |
Inverse Emerging and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Emerging and Barings Active
The main advantage of trading using opposite Inverse Emerging and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Emerging 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.| Inverse Emerging vs. Davis Financial Fund | Inverse Emerging vs. 1919 Financial Services | Inverse Emerging vs. Putnam Global Financials | Inverse Emerging vs. Blackrock Financial Institutions |
| Barings Active vs. Extended Market Index | Barings Active vs. Delaware Limited Term Diversified | Barings Active vs. Inverse Emerging Markets | Barings Active vs. Franklin Emerging Market |
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 .
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