Correlation Between Copeland Risk and Barings Global

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

By analyzing existing cross correlation between Copeland Risk Managed and Barings Global Credit, you can compare the effects of market volatilities on Copeland Risk and Barings Global 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 Copeland Risk with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copeland Risk and Barings Global.

Diversification Opportunities for Copeland Risk and Barings Global

-0.13

Correlation Coefficient

Copeland Risk  Barings Global

Good diversification

The 3 months correlation between Copeland and Barings is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Copeland Risk Managed and Barings Global Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Credit and Copeland Risk 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 Copeland Risk Managed are associated (or correlated) with Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Credit has no effect on the direction of Copeland Risk i.e., Copeland Risk and Barings Global go up and down completely randomly.

Pair Corralation between Copeland Risk and Barings Global

Assuming the 90 days horizon Copeland Risk Managed is expected to under-perform the Barings Global. In addition to that, Copeland Risk is 39.22 times more volatile than Barings Global Credit. It trades about -0.2 of its total potential returns per unit of risk. Barings Global Credit is currently generating about 0.08 per unit of volatility. If you would invest  773.00  in Barings Global Credit on September 19, 2024 and sell it today you would earn a total of  1.00  from holding Barings Global Credit or generate 0.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Copeland Risk Managed  vs.  Barings Global Credit

Copeland Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copeland Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Barings Global Credit

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Global Credit are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Barings Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Copeland Risk and Barings Global

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

The idea behind Copeland Risk Managed and Barings Global Credit 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.