Correlation Between Cornerstone Strategic and Barings Us

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

By analyzing existing cross correlation between Cornerstone Strategic Return and Barings High Yield, you can compare the effects of market volatilities on Cornerstone Strategic and Barings Us 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 Cornerstone Strategic with a short position of Barings Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Barings Us.

Diversification Opportunities for Cornerstone Strategic and Barings Us

0.73

Correlation Coefficient

Cornerstone Strategic  Barings Us

Poor diversification

The 3 months correlation between Cornerstone and Barings is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Return and Barings High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings High Yield and Cornerstone Strategic 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 Cornerstone Strategic Return are associated (or correlated) with Barings Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings High Yield has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Barings Us go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Barings Us

Considering the 90-day investment horizon Cornerstone Strategic Return is expected to generate 4.31 times more return on investment than Barings Us. However, Cornerstone Strategic is 4.31 times more volatile than Barings High Yield. It trades about 0.12 of its potential returns per unit of risk. Barings High Yield is currently generating about 0.25 per unit of risk. If you would invest  849.00  in Cornerstone Strategic Return on October 22, 2024 and sell it today you would earn a total of  18.00  from holding Cornerstone Strategic Return or generate 2.12% return on investment over 90 days.

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

Cornerstone Strategic Return  vs.  Barings High Yield

Cornerstone Strategic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Return are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly unfluctuating basic indicators, Cornerstone Strategic may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Barings High Yield

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Barings High Yield are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Barings Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cornerstone Strategic and Barings Us

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

The idea behind Cornerstone Strategic Return and Barings High Yield 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .