Correlation Between California Bond and Barings Us
Can any of the company-specific risk be diversified away by investing in both California Bond and Barings Us 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 California Bond and Barings Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Barings High Yield, you can compare the effects of market volatilities on California Bond and Barings Us 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 California Bond with a short position of Barings Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Barings Us.
Diversification Opportunities for California Bond and Barings Us
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between California and Barings is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Barings High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings High Yield and California Bond 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 California Bond Fund are associated (or correlated) with Barings Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings High Yield has no effect on the direction of California Bond i.e., California Bond and Barings Us go up and down completely randomly.
Pair Corralation between California Bond and Barings Us
Assuming the 90 days horizon California Bond Fund is expected to under-perform the Barings Us. In addition to that, California Bond is 1.61 times more volatile than Barings High Yield. It trades about -0.03 of its total potential returns per unit of risk. Barings High Yield is currently generating about 0.22 per unit of volatility. If you would invest 811.00 in Barings High Yield on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Barings High Yield or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Barings High Yield
Performance |
| Timeline |
| California Bond |
| Barings High Yield |
California Bond and Barings Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Barings Us
The main advantage of trading using opposite California Bond and Barings Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Barings Us 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 Us will offset losses from the drop in Barings Us' long position.| California Bond vs. T Rowe Price | California Bond vs. Growth Portfolio Class | California Bond vs. Ab Global Bond | California Bond vs. Tax Managed Large Cap |
| Barings Us vs. Allianzgi Convertible Income | Barings Us vs. Fidelity Sai Convertible | Barings Us vs. Calamos Dynamic Convertible | Barings Us vs. Absolute Convertible Arbitrage |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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