Correlation Between Barings Active and Intermediate Government
Can any of the company-specific risk be diversified away by investing in both Barings Active and Intermediate Government 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 Active and Intermediate Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Intermediate Government Bond, you can compare the effects of market volatilities on Barings Active and Intermediate Government 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 Active with a short position of Intermediate Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Intermediate Government.
Diversification Opportunities for Barings Active and Intermediate Government
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barings and Intermediate is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government and Barings Active 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 Active Short are associated (or correlated) with Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of Barings Active i.e., Barings Active and Intermediate Government go up and down completely randomly.
Pair Corralation between Barings Active and Intermediate Government
Assuming the 90 days horizon Barings Active is expected to generate 1.11 times less return on investment than Intermediate Government. But when comparing it to its historical volatility, Barings Active Short is 1.13 times less risky than Intermediate Government. It trades about 0.31 of its potential returns per unit of risk. Intermediate Government Bond is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 947.00 in Intermediate Government Bond on May 27, 2025 and sell it today you would earn a total of 9.00 from holding Intermediate Government Bond or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Intermediate Government Bond
Performance |
| Timeline |
| Barings Active Short |
| Intermediate Government |
Barings Active and Intermediate Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Intermediate Government
The main advantage of trading using opposite Barings Active and Intermediate Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Intermediate Government 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 Intermediate Government will offset losses from the drop in Intermediate Government's long position.| Barings Active vs. Fm Investments Large | Barings Active vs. Tactical Multi Purpose Fund | Barings Active vs. Old Westbury Large | Barings Active vs. Guidemark Large Cap |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |