Correlation Between Barings Global and Global Real
Can any of the company-specific risk be diversified away by investing in both Barings Global and Global Real 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 Global Real 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 Global Real Estate, you can compare the effects of market volatilities on Barings Global and Global Real 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 Global Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Global Real.
Diversification Opportunities for Barings Global and Global Real
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barings and Global is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Global Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Real Estate 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 Global Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Real Estate has no effect on the direction of Barings Global i.e., Barings Global and Global Real go up and down completely randomly.
Pair Corralation between Barings Global and Global Real
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.17 times more return on investment than Global Real. However, Barings Global Floating is 5.92 times less risky than Global Real. It trades about 0.1 of its potential returns per unit of risk. Global Real Estate is currently generating about -0.04 per unit of risk. If you would invest 866.00 in Barings Global Floating on December 1, 2024 and sell it today you would earn a total of 8.00 from holding Barings Global Floating or generate 0.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Barings Global Floating vs. Global Real Estate
Performance |
Timeline |
Barings Global Floating |
Global Real Estate |
Barings Global and Global Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barings Global and Global Real
The main advantage of trading using opposite Barings Global and Global Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Global Real 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 Global Real will offset losses from the drop in Global Real's long position.Barings Global vs. Hartford Moderate Allocation | Barings Global vs. Knights Of Umbus | Barings Global vs. Growth Allocation Fund | Barings Global vs. Touchstone Large Cap |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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