Correlation Between Barings Global and Catalyst/warrington

Can any of the company-specific risk be diversified away by investing in both Barings Global and Catalyst/warrington 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 Catalyst/warrington 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 Catalystwarrington Strategic Program, you can compare the effects of market volatilities on Barings Global and Catalyst/warrington 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 Catalyst/warrington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Catalyst/warrington.

Diversification Opportunities for Barings Global and Catalyst/warrington

0.27

Correlation Coefficient

Barings Global  Catalyst/warrington

Modest diversification

The 3 months correlation between Barings and Catalyst/warrington is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Catalystwarrington Strategic P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst/warrington 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 Catalyst/warrington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst/warrington has no effect on the direction of Barings Global i.e., Barings Global and Catalyst/warrington go up and down completely randomly.

Pair Corralation between Barings Global and Catalyst/warrington

Assuming the 90 days horizon Barings Global Floating is expected to generate 1.38 times more return on investment than Catalyst/warrington. However, Barings Global is 1.38 times more volatile than Catalystwarrington Strategic Program. It trades about 0.21 of its potential returns per unit of risk. Catalystwarrington Strategic Program is currently generating about 0.02 per unit of risk. If you would invest  860.00  in Barings Global Floating on October 24, 2024 and sell it today you would earn a total of  17.00  from holding Barings Global Floating or generate 1.98% return on investment over 90 days.

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

Barings Global Floating  vs.  Catalystwarrington Strategic P

Barings Global Floating

Risk-Adjusted Performance

16 of 100

Solid

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

Catalyst/warrington

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystwarrington Strategic Program are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalyst/warrington 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 Global and Catalyst/warrington

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

The idea behind Barings Global Floating and Catalystwarrington Strategic Program 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.