Correlation Between Vanguard Global and Barings Global
Can any of the company-specific risk be diversified away by investing in both Vanguard Global 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 Vanguard Global and Barings Global 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 Global Floating, you can compare the effects of market volatilities on Vanguard Global 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 Vanguard Global with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and Barings Global.
Diversification Opportunities for Vanguard Global and Barings Global
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vanguard and Barings is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Credit and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating 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 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 Floating has no effect on the direction of Vanguard Global i.e., Vanguard Global and Barings Global go up and down completely randomly.
Pair Corralation between Vanguard Global and Barings Global
Assuming the 90 days horizon Vanguard Global is expected to generate 1.31 times less return on investment than Barings Global. In addition to that, Vanguard Global is 1.56 times more volatile than Barings Global Floating. It trades about 0.09 of its total potential returns per unit of risk. Barings Global Floating is currently generating about 0.18 per unit of volatility. If you would invest 814.00 in Barings Global Floating on November 3, 2024 and sell it today you would earn a total of 61.00 from holding Barings Global Floating or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Credit vs. Barings Global Floating
Performance |
| Timeline |
| Vanguard Global Credit |
| Barings Global Floating |
Vanguard Global and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and Barings Global
The main advantage of trading using opposite Vanguard Global and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global 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.| Vanguard Global vs. Smallcap World Fund | Vanguard Global vs. Gmo Global Equity | Vanguard Global vs. Enhanced Fixed Income | Vanguard Global vs. Old Westbury Fixed |
| Barings Global vs. Rbc Global Equity | Barings Global vs. Us Global Investors | Barings Global vs. Gmo Global Equity | Barings Global vs. Aqr Global Macro |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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