Correlation Between Barings Emerging and Pioneer Multi-asset

Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Pioneer Multi-asset 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 Pioneer Multi-asset 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 Pioneer Multi Asset Income, you can compare the effects of market volatilities on Barings Emerging and Pioneer Multi-asset 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 Pioneer Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Pioneer Multi-asset.

Diversification Opportunities for Barings Emerging and Pioneer Multi-asset

0.94

Correlation Coefficient

Barings Emerging  Pioneer Multi-asset

Almost no diversification

The 3 months correlation between Barings and Pioneer is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Pioneer Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Multi Asset 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 Pioneer Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Multi Asset has no effect on the direction of Barings Emerging i.e., Barings Emerging and Pioneer Multi-asset go up and down completely randomly.

Pair Corralation between Barings Emerging and Pioneer Multi-asset

Assuming the 90 days horizon Barings Emerging is expected to generate 1.47 times less return on investment than Pioneer Multi-asset. But when comparing it to its historical volatility, Barings Emerging Markets is 1.41 times less risky than Pioneer Multi-asset. It trades about 0.28 of its potential returns per unit of risk. Pioneer Multi Asset Income is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  1,113  in Pioneer Multi Asset Income on December 30, 2024 and sell it today you would earn a total of  75.00  from holding Pioneer Multi Asset Income or generate 6.74% return on investment over 90 days.

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

Barings Emerging Markets  vs.  Pioneer Multi Asset Income

Barings Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Emerging Markets are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Barings Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pioneer Multi Asset

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Multi Asset Income are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pioneer Multi-asset may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Barings Emerging and Pioneer Multi-asset

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

The idea behind Barings Emerging Markets and Pioneer Multi Asset Income 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.