Correlation Between Barings Active and Evaluator Moderate

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

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

Diversification Opportunities for Barings Active and Evaluator Moderate

-0.31

Correlation Coefficient

Barings Active  Evaluator Moderate

Very good diversification

The 3 months correlation between Barings and Evaluator is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Evaluator Moderate Rms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evaluator Moderate Rms and Barings Active 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 Active Short are associated (or correlated) with Evaluator Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evaluator Moderate Rms has no effect on the direction of Barings Active i.e., Barings Active and Evaluator Moderate go up and down completely randomly.

Pair Corralation between Barings Active and Evaluator Moderate

Assuming the 90 days horizon Barings Active Short is expected to generate 0.19 times more return on investment than Evaluator Moderate. However, Barings Active Short is 5.39 times less risky than Evaluator Moderate. It trades about 0.21 of its potential returns per unit of risk. Evaluator Moderate Rms is currently generating about -0.01 per unit of risk. If you would invest  917.00  in Barings Active Short on December 30, 2024 and sell it today you would earn a total of  13.00  from holding Barings Active Short or generate 1.42% return on investment over 90 days.

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

Barings Active Short  vs.  Evaluator Moderate Rms

Barings Active Short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Active Short are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Barings Active is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Evaluator Moderate Rms

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Barings Active and Evaluator Moderate

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

The idea behind Barings Active Short and Evaluator Moderate Rms 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.