Correlation Between Transamerica High and Barings Active
Can any of the company-specific risk be diversified away by investing in both Transamerica High 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 Transamerica High and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica High Yield and Barings Active Short, you can compare the effects of market volatilities on Transamerica High 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 Transamerica High with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica High and Barings Active.
Diversification Opportunities for Transamerica High and Barings Active
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transamerica and Barings is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica High Yield 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 Transamerica High 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 Transamerica High Yield 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 Transamerica High i.e., Transamerica High and Barings Active go up and down completely randomly.
Pair Corralation between Transamerica High and Barings Active
Assuming the 90 days horizon Transamerica High is expected to generate 4.12 times less return on investment than Barings Active. In addition to that, Transamerica High is 2.2 times more volatile than Barings Active Short. It trades about 0.02 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 922.00 in Barings Active Short on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Barings Active Short or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica High Yield vs. Barings Active Short
Performance |
| Timeline |
| Transamerica High Yield |
| Barings Active Short |
Transamerica High and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica High and Barings Active
The main advantage of trading using opposite Transamerica High and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica High 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.| Transamerica High vs. Barings High Yield | Transamerica High vs. Ultra Short Fixed Income | Transamerica High vs. Ambrus Core Bond | Transamerica High vs. Rationalpier 88 Convertible |
| Barings Active vs. Mid Cap Growth Profund | Barings Active vs. Fpa Queens Road | Barings Active vs. Applied Finance Explorer | Barings Active vs. Heartland Value Plus |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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