Correlation Between Barings Global and Wisdomtree Siegel

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

Diversification Opportunities for Barings Global and Wisdomtree Siegel

-0.43

Correlation Coefficient

Barings Global  Wisdomtree Siegel

Very good diversification

The 3 months correlation between Barings and Wisdomtree is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Wisdomtree Siegel Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisdomtree Siegel Global 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 Wisdomtree Siegel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisdomtree Siegel Global has no effect on the direction of Barings Global i.e., Barings Global and Wisdomtree Siegel go up and down completely randomly.

Pair Corralation between Barings Global and Wisdomtree Siegel

Assuming the 90 days horizon Barings Global Floating is expected to generate 0.33 times more return on investment than Wisdomtree Siegel. However, Barings Global Floating is 3.04 times less risky than Wisdomtree Siegel. It trades about 0.22 of its potential returns per unit of risk. Wisdomtree Siegel Global is currently generating about 0.05 per unit of risk. If you would invest  715.00  in Barings Global Floating on August 31, 2024 and sell it today you would earn a total of  163.00  from holding Barings Global Floating or generate 22.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.86%
Values	Daily Returns

Barings Global Floating  vs.  Wisdomtree Siegel Global

Barings Global Floating

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Global Floating are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Barings Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wisdomtree Siegel Global

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wisdomtree Siegel Global are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Wisdomtree Siegel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Barings Global and Wisdomtree Siegel

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

The idea behind Barings Global Floating and Wisdomtree Siegel Global 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.