Correlation Between Barings Global and Intel

Can any of the company-specific risk be diversified away by investing in both Barings Global and Intel 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 Barings Global and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barings Global Umbrella and Intel, you can compare the effects of market volatilities on Barings Global and Intel 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 Barings Global with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Intel.

Diversification Opportunities for Barings Global and Intel

0.07

Correlation Coefficient

Barings Global  Intel

Significant diversification

The 3 months correlation between Barings and Intel is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Umbrella and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Barings 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 Barings Global Umbrella are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Barings Global i.e., Barings Global and Intel go up and down completely randomly.

Pair Corralation between Barings Global and Intel

Assuming the 90 days trading horizon Barings Global Umbrella is expected to generate 0.11 times more return on investment than Intel. However, Barings Global Umbrella is 9.08 times less risky than Intel. It trades about 0.19 of its potential returns per unit of risk. Intel is currently generating about -0.07 per unit of risk. If you would invest  627.00  in Barings Global Umbrella on September 22, 2024 and sell it today you would earn a total of  124.00  from holding Barings Global Umbrella or generate 19.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Barings Global Umbrella  vs.  Intel

Barings Global Umbrella

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Global Umbrella are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat fragile basic indicators, Barings Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Barings Global and Intel

The main advantage of trading using opposite Barings Global and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.

The idea behind Barings Global Umbrella and Intel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.