Correlation Between Barings Emerging and Ab Ohio

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

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

Diversification Opportunities for Barings Emerging and Ab Ohio

0.73

Correlation Coefficient

Barings Emerging  Ab Ohio

Poor diversification

The 3 months correlation between Barings and AOHCX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Ab Ohio Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Ohio Portfolio and Barings Emerging 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 Emerging Markets are associated (or correlated) with Ab Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Ohio Portfolio has no effect on the direction of Barings Emerging i.e., Barings Emerging and Ab Ohio go up and down completely randomly.

Pair Corralation between Barings Emerging and Ab Ohio

Assuming the 90 days horizon Barings Emerging Markets is expected to generate 1.6 times more return on investment than Ab Ohio. However, Barings Emerging is 1.6 times more volatile than Ab Ohio Portfolio. It trades about 0.1 of its potential returns per unit of risk. Ab Ohio Portfolio is currently generating about 0.11 per unit of risk. If you would invest  668.00  in Barings Emerging Markets on October 5, 2024 and sell it today you would earn a total of  78.00  from holding Barings Emerging Markets or generate 11.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.68%
Values	Daily Returns

Barings Emerging Markets  vs.  Ab Ohio Portfolio

Barings Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ab Ohio Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Ohio Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Ab Ohio 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 Emerging and Ab Ohio

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

The idea behind Barings Emerging Markets and Ab Ohio Portfolio 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.