Correlation Between Barings BDC and 302635AL1

Can any of the company-specific risk be diversified away by investing in both Barings BDC and 302635AL1 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 302635AL1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barings BDC and FSK 325 15 JUL 27, you can compare the effects of market volatilities on Barings BDC and 302635AL1 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 302635AL1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and 302635AL1.

Diversification Opportunities for Barings BDC and 302635AL1

0.34

Correlation Coefficient

Barings BDC  302635AL1

Weak diversification

The 3 months correlation between Barings and 302635AL1 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and FSK 325 15 JUL 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSK 325 15 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 302635AL1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSK 325 15 has no effect on the direction of Barings BDC i.e., Barings BDC and 302635AL1 go up and down completely randomly.

Pair Corralation between Barings BDC and 302635AL1

Given the investment horizon of 90 days Barings BDC is expected to generate 0.4 times more return on investment than 302635AL1. However, Barings BDC is 2.47 times less risky than 302635AL1. It trades about -0.2 of its potential returns per unit of risk. FSK 325 15 JUL 27 is currently generating about -0.23 per unit of risk. If you would invest  996.00  in Barings BDC on October 4, 2024 and sell it today you would lose (39.00) from holding Barings BDC or give up 3.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Barings BDC  vs.  FSK 325 15 JUL 27

Barings BDC

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Barings BDC has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

FSK 325 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FSK 325 15 JUL 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for FSK 325 15 JUL 27 investors.

Pair Trading with Barings BDC and 302635AL1

The main advantage of trading using opposite Barings BDC and 302635AL1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, 302635AL1 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 302635AL1 will offset losses from the drop in 302635AL1's long position.

The idea behind Barings BDC and FSK 325 15 JUL 27 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.