Correlation Between Vaughan Nelson and Barings Active
Can any of the company-specific risk be diversified away by investing in both Vaughan Nelson 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 Vaughan Nelson and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaughan Nelson Value and Barings Active Short, you can compare the effects of market volatilities on Vaughan Nelson 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 Vaughan Nelson with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaughan Nelson and Barings Active.
Diversification Opportunities for Vaughan Nelson and Barings Active
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vaughan and Barings is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vaughan Nelson Value 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 Vaughan Nelson 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 Vaughan Nelson Value 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 Vaughan Nelson i.e., Vaughan Nelson and Barings Active go up and down completely randomly.
Pair Corralation between Vaughan Nelson and Barings Active
Assuming the 90 days horizon Vaughan Nelson Value is expected to generate 10.81 times more return on investment than Barings Active. However, Vaughan Nelson is 10.81 times more volatile than Barings Active Short. It trades about 0.35 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.09 per unit of risk. If you would invest 2,653 in Vaughan Nelson Value on September 1, 2024 and sell it today you would earn a total of 265.00 from holding Vaughan Nelson Value or generate 9.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vaughan Nelson Value vs. Barings Active Short
Performance |
| Timeline |
| Vaughan Nelson Value |
| Barings Active Short |
Vaughan Nelson and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaughan Nelson and Barings Active
The main advantage of trading using opposite Vaughan Nelson and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaughan Nelson 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.| Vaughan Nelson vs. Asg Managed Futures | Vaughan Nelson vs. Asg Managed Futures | Vaughan Nelson vs. Natixis Oakmark | Vaughan Nelson vs. Natixis Oakmark International |
| Barings Active vs. Ab Bond Inflation | Barings Active vs. Western Asset Inflation | Barings Active vs. Blackrock Inflation Protected | Barings Active vs. Aqr Managed Futures |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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