Correlation Between Braddock Multi and Barings Us

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

By analyzing existing cross correlation between Braddock Multi Strategy Income and Barings High Yield, you can compare the effects of market volatilities on Braddock Multi and Barings Us 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 Braddock Multi with a short position of Barings Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braddock Multi and Barings Us.

Diversification Opportunities for Braddock Multi and Barings Us

0.75

Correlation Coefficient

Braddock Multi  Barings Us

Poor diversification

The 3 months correlation between Braddock and Barings is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Braddock Multi Strategy Income and Barings High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings High Yield and Braddock Multi 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 Braddock Multi Strategy Income are associated (or correlated) with Barings Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings High Yield has no effect on the direction of Braddock Multi i.e., Braddock Multi and Barings Us go up and down completely randomly.

Pair Corralation between Braddock Multi and Barings Us

Assuming the 90 days horizon Braddock Multi Strategy Income is expected to under-perform the Barings Us. In addition to that, Braddock Multi is 1.11 times more volatile than Barings High Yield. It trades about -0.3 of its total potential returns per unit of risk. Barings High Yield is currently generating about -0.31 per unit of volatility. If you would invest  821.00  in Barings High Yield on October 9, 2024 and sell it today you would lose (8.00) from holding Barings High Yield or give up 0.97% of portfolio value over 90 days.

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

Braddock Multi Strategy Income  vs.  Barings High Yield

Braddock Multi Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Braddock Multi Strategy Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Braddock Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Barings High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barings High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Barings Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Braddock Multi and Barings Us

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

The idea behind Braddock Multi Strategy Income and Barings High Yield 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.