Correlation Between Barings BDC and 694308KG1

Can any of the company-specific risk be diversified away by investing in both Barings BDC and 694308KG1 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 694308KG1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barings BDC and PCG 59 15 JUN 32, you can compare the effects of market volatilities on Barings BDC and 694308KG1 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 694308KG1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and 694308KG1.

Diversification Opportunities for Barings BDC and 694308KG1

0.3

Correlation Coefficient

Barings BDC  694308KG1

Weak diversification

The 3 months correlation between Barings and 694308KG1 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and PCG 59 15 JUN 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCG 59 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 694308KG1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCG 59 15 has no effect on the direction of Barings BDC i.e., Barings BDC and 694308KG1 go up and down completely randomly.

Pair Corralation between Barings BDC and 694308KG1

Given the investment horizon of 90 days Barings BDC is expected to generate 2.43 times more return on investment than 694308KG1. However, Barings BDC is 2.43 times more volatile than PCG 59 15 JUN 32. It trades about 0.05 of its potential returns per unit of risk. PCG 59 15 JUN 32 is currently generating about -0.11 per unit of risk. If you would invest  942.00  in Barings BDC on October 7, 2024 and sell it today you would earn a total of  28.00  from holding Barings BDC or generate 2.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Barings BDC  vs.  PCG 59 15 JUN 32

Barings BDC

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Barings BDC are ranked lower than 4 (%) 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.

PCG 59 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCG 59 15 JUN 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 694308KG1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Barings BDC and 694308KG1

The main advantage of trading using opposite Barings BDC and 694308KG1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, 694308KG1 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 694308KG1 will offset losses from the drop in 694308KG1's long position.

The idea behind Barings BDC and PCG 59 15 JUN 32 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.