Correlation Between Barings Active and Spectrum Unconstrained
Can any of the company-specific risk be diversified away by investing in both Barings Active and Spectrum Unconstrained 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 Spectrum Unconstrained 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 Spectrum Unconstrained, you can compare the effects of market volatilities on Barings Active and Spectrum Unconstrained 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 Spectrum Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Spectrum Unconstrained.
Diversification Opportunities for Barings Active and Spectrum Unconstrained
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barings and Spectrum is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Spectrum Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Unconstrained 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 Spectrum Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Unconstrained has no effect on the direction of Barings Active i.e., Barings Active and Spectrum Unconstrained go up and down completely randomly.
Pair Corralation between Barings Active and Spectrum Unconstrained
Assuming the 90 days horizon Barings Active Short is expected to generate 0.51 times more return on investment than Spectrum Unconstrained. However, Barings Active Short is 1.97 times less risky than Spectrum Unconstrained. It trades about 0.06 of its potential returns per unit of risk. Spectrum Unconstrained is currently generating about 0.0 per unit of risk. If you would invest 922.00 in Barings Active Short on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Barings Active Short or generate 0.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Barings Active Short vs. Spectrum Unconstrained
Performance |
Timeline |
Barings Active Short |
Spectrum Unconstrained |
Barings Active and Spectrum Unconstrained Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barings Active and Spectrum Unconstrained
The main advantage of trading using opposite Barings Active and Spectrum Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Spectrum Unconstrained 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 Spectrum Unconstrained will offset losses from the drop in Spectrum Unconstrained's long position.Barings Active vs. Champlain Small | Barings Active vs. Franklin Small Cap | Barings Active vs. Touchstone Small Cap | Barings Active vs. Df Dent Small |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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