Correlation Between Barings Global and Blackrock Strategic
Can any of the company-specific risk be diversified away by investing in both Barings Global and Blackrock Strategic 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 Global and Blackrock Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Blackrock Strategic Income, you can compare the effects of market volatilities on Barings Global and Blackrock Strategic 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 Global with a short position of Blackrock Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Blackrock Strategic.
Diversification Opportunities for Barings Global and Blackrock Strategic
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and BlackRock is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Blackrock Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Strategic and Barings Global 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 Global Floating are associated (or correlated) with Blackrock Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Strategic has no effect on the direction of Barings Global i.e., Barings Global and Blackrock Strategic go up and down completely randomly.
Pair Corralation between Barings Global and Blackrock Strategic
Assuming the 90 days horizon Barings Global is expected to generate 3.07 times less return on investment than Blackrock Strategic. But when comparing it to its historical volatility, Barings Global Floating is 1.08 times less risky than Blackrock Strategic. It trades about 0.06 of its potential returns per unit of risk. Blackrock Strategic Income is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 936.00 in Blackrock Strategic Income on December 30, 2024 and sell it today you would earn a total of 17.00 from holding Blackrock Strategic Income or generate 1.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Barings Global Floating vs. Blackrock Strategic Income
Performance |
Timeline |
Barings Global Floating |
Blackrock Strategic |
Barings Global and Blackrock Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barings Global and Blackrock Strategic
The main advantage of trading using opposite Barings Global and Blackrock Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Blackrock Strategic 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 Blackrock Strategic will offset losses from the drop in Blackrock Strategic's long position.Barings Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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