Correlation Between Barings BDC and 04686JAF8

Can any of the company-specific risk be diversified away by investing in both Barings BDC and 04686JAF8 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 BDC and 04686JAF8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barings BDC and ATH 665 01 FEB 33, you can compare the effects of market volatilities on Barings BDC and 04686JAF8 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 BDC with a short position of 04686JAF8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and 04686JAF8.

Diversification Opportunities for Barings BDC and 04686JAF8

0.34

Correlation Coefficient

Barings BDC  04686JAF8

Weak diversification

The 3 months correlation between Barings and 04686JAF8 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and ATH 665 01 FEB 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATH 665 01 and Barings BDC 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 BDC are associated (or correlated) with 04686JAF8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATH 665 01 has no effect on the direction of Barings BDC i.e., Barings BDC and 04686JAF8 go up and down completely randomly.

Pair Corralation between Barings BDC and 04686JAF8

Given the investment horizon of 90 days Barings BDC is expected to generate 1.06 times more return on investment than 04686JAF8. However, Barings BDC is 1.06 times more volatile than ATH 665 01 FEB 33. It trades about 0.07 of its potential returns per unit of risk. ATH 665 01 FEB 33 is currently generating about 0.03 per unit of risk. If you would invest  922.00  in Barings BDC on December 25, 2024 and sell it today you would earn a total of  36.00  from holding Barings BDC or generate 3.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Barings BDC  vs.  ATH 665 01 FEB 33

Barings BDC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barings BDC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Barings BDC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

ATH 665 01

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATH 665 01 FEB 33 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 04686JAF8 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Barings BDC and 04686JAF8

The main advantage of trading using opposite Barings BDC and 04686JAF8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, 04686JAF8 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 04686JAF8 will offset losses from the drop in 04686JAF8's long position.

The idea behind Barings BDC and ATH 665 01 FEB 33 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 .