Correlation Between Global X and Barings Global
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Uranium and Barings Global Short, you can compare the effects of market volatilities on Global X 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 Global X with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Barings Global.
Diversification Opportunities for Global X and Barings Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Barings is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Global X Uranium and Barings Global Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Short and Global X 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 Global X Uranium 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 Short has no effect on the direction of Global X i.e., Global X and Barings Global go up and down completely randomly.
Pair Corralation between Global X and Barings Global
Considering the 90-day investment horizon Global X is expected to generate 28.06 times less return on investment than Barings Global. In addition to that, Global X is 1.77 times more volatile than Barings Global Short. It trades about 0.0 of its total potential returns per unit of risk. Barings Global Short is currently generating about 0.14 per unit of volatility. If you would invest 1,517 in Barings Global Short on August 27, 2024 and sell it today you would earn a total of 54.00 from holding Barings Global Short or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Uranium vs. Barings Global Short
Performance |
| Timeline |
| Global X Uranium |
| Barings Global Short |
Global X and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Barings Global
The main advantage of trading using opposite Global X and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.The idea behind Global X Uranium and Barings Global Short pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Barings Global vs. Western Asset Global | Barings Global vs. Western Asset High | Barings Global vs. Voya Global Advantage | Barings Global vs. Voya Global Equity |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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