Correlation Between Vanguard Global and Barings Active
Can any of the company-specific risk be diversified away by investing in both Vanguard Global 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 Vanguard Global and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Global Credit and Barings Active Short, you can compare the effects of market volatilities on Vanguard Global 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 Vanguard Global with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and Barings Active.
Diversification Opportunities for Vanguard Global and Barings Active
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vanguard and Barings is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Credit 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 Vanguard Global 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 Vanguard Global Credit 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 Vanguard Global i.e., Vanguard Global and Barings Active go up and down completely randomly.
Pair Corralation between Vanguard Global and Barings Active
Assuming the 90 days horizon Vanguard Global Credit is expected to generate 1.92 times more return on investment than Barings Active. However, Vanguard Global is 1.92 times more volatile than Barings Active Short. It trades about 0.12 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.14 per unit of risk. If you would invest 1,923 in Vanguard Global Credit on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Vanguard Global Credit or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Credit vs. Barings Active Short
Performance |
| Timeline |
| Vanguard Global Credit |
| Barings Active Short |
Vanguard Global and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and Barings Active
The main advantage of trading using opposite Vanguard Global and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global 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.| Vanguard Global vs. Calvert High Yield | Vanguard Global vs. T Rowe Price | Vanguard Global vs. Siit High Yield | Vanguard Global vs. Multimanager Lifestyle Aggressive |
| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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