Correlation Between Vanguard Health and Barings Active
Can any of the company-specific risk be diversified away by investing in both Vanguard Health 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 Health 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 Health Care and Barings Active Short, you can compare the effects of market volatilities on Vanguard Health 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 Health with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Barings Active.
Diversification Opportunities for Vanguard Health and Barings Active
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Barings is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care 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 Health 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 Health Care 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 Health i.e., Vanguard Health and Barings Active go up and down completely randomly.
Pair Corralation between Vanguard Health and Barings Active
Assuming the 90 days horizon Vanguard Health Care is expected to under-perform the Barings Active. In addition to that, Vanguard Health is 4.78 times more volatile than Barings Active Short. It trades about -0.01 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.15 per unit of volatility. If you would invest 820.00 in Barings Active Short on October 13, 2024 and sell it today you would earn a total of 104.00 from holding Barings Active Short or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vanguard Health Care vs. Barings Active Short
Performance |
| Timeline |
| Vanguard Health Care |
| Barings Active Short |
Vanguard Health and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Barings Active
The main advantage of trading using opposite Vanguard Health and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health 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 Health vs. Vanguard Energy Fund | Vanguard Health vs. Vanguard Dividend Growth | Vanguard Health vs. Vanguard Wellington Fund | Vanguard Health vs. Vanguard Capital Opportunity |
| Barings Active vs. Calvert Developed Market | Barings Active vs. Fidelity New Markets | Barings Active vs. Dreyfus Bond Market | Barings Active vs. Investec Emerging Markets |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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