Correlation Between Barings Active and Aristotlesaul Global

Can any of the company-specific risk be diversified away by investing in both Barings Active and Aristotlesaul 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 Barings Active and Aristotlesaul Global 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 Aristotlesaul Global Equity, you can compare the effects of market volatilities on Barings Active and Aristotlesaul 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 Barings Active with a short position of Aristotlesaul Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Aristotlesaul Global.

Diversification Opportunities for Barings Active and Aristotlesaul Global

-0.4

Correlation Coefficient

Barings Active  Aristotlesaul Global

Very good diversification

The 3 months correlation between Barings and Aristotlesaul is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Aristotlesaul Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotlesaul Global 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 Aristotlesaul Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotlesaul Global has no effect on the direction of Barings Active i.e., Barings Active and Aristotlesaul Global go up and down completely randomly.

Pair Corralation between Barings Active and Aristotlesaul Global

Assuming the 90 days horizon Barings Active Short is expected to generate 0.08 times more return on investment than Aristotlesaul Global. However, Barings Active Short is 13.21 times less risky than Aristotlesaul Global. It trades about 0.19 of its potential returns per unit of risk. Aristotlesaul Global Equity is currently generating about -0.05 per unit of risk. If you would invest  865.00  in Barings Active Short on September 25, 2024 and sell it today you would earn a total of  58.00  from holding Barings Active Short or generate 6.71% return on investment over 90 days.

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

Barings Active Short  vs.  Aristotlesaul Global Equity

Barings Active Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barings Active Short has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Barings Active is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aristotlesaul Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aristotlesaul Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Barings Active and Aristotlesaul Global

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

The idea behind Barings Active Short and Aristotlesaul Global Equity 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..