Correlation Between Sierra Tactical and Barings Active
Can any of the company-specific risk be diversified away by investing in both Sierra Tactical 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 Sierra Tactical and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra Tactical Municipal and Barings Active Short, you can compare the effects of market volatilities on Sierra Tactical 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 Sierra Tactical with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Tactical and Barings Active.
Diversification Opportunities for Sierra Tactical and Barings Active
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sierra and Barings is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sierra Tactical Municipal 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 Sierra Tactical 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 Sierra Tactical Municipal 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 Sierra Tactical i.e., Sierra Tactical and Barings Active go up and down completely randomly.
Pair Corralation between Sierra Tactical and Barings Active
Assuming the 90 days horizon Sierra Tactical Municipal is expected to generate 3.23 times more return on investment than Barings Active. However, Sierra Tactical is 3.23 times more volatile than Barings Active Short. It trades about 0.16 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.09 per unit of risk. If you would invest 2,571 in Sierra Tactical Municipal on September 5, 2024 and sell it today you would earn a total of 32.00 from holding Sierra Tactical Municipal or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sierra Tactical Municipal vs. Barings Active Short
Performance |
| Timeline |
| Sierra Tactical Municipal |
| Barings Active Short |
Sierra Tactical and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Tactical and Barings Active
The main advantage of trading using opposite Sierra Tactical and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Tactical 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.| Sierra Tactical vs. Barings Active Short | Sierra Tactical vs. Rbc Short Duration | Sierra Tactical vs. Aqr Long Short Equity | Sierra Tactical vs. Sterling Capital Short |
| Barings Active vs. American Funds Inflation | Barings Active vs. Goldman Sachs Managed | Barings Active vs. Guidepath Managed Futures | Barings Active vs. Ab Bond Inflation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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