Correlation Between Pacteo Actions and Barings Global

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

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

Diversification Opportunities for Pacteo Actions and Barings Global

-0.53

Correlation Coefficient

Pacteo Actions  Barings Global

Excellent diversification

The 3 months correlation between Pacteo and Barings is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Pacteo Actions Europe and Barings Global Umbrella in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Umbrella and Pacteo Actions 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 Pacteo Actions Europe 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 Umbrella has no effect on the direction of Pacteo Actions i.e., Pacteo Actions and Barings Global go up and down completely randomly.

Pair Corralation between Pacteo Actions and Barings Global

Assuming the 90 days trading horizon Pacteo Actions Europe is expected to generate 2.06 times more return on investment than Barings Global. However, Pacteo Actions is 2.06 times more volatile than Barings Global Umbrella. It trades about 0.1 of its potential returns per unit of risk. Barings Global Umbrella is currently generating about 0.17 per unit of risk. If you would invest  1,357  in Pacteo Actions Europe on September 21, 2024 and sell it today you would earn a total of  309.00  from holding Pacteo Actions Europe or generate 22.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pacteo Actions Europe  vs.  Barings Global Umbrella

Pacteo Actions Europe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacteo Actions Europe has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Pacteo Actions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Pacteo Actions and Barings Global

The main advantage of trading using opposite Pacteo Actions and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacteo Actions 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.

The idea behind Pacteo Actions Europe and Barings Global Umbrella 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.