Correlation Between Barloworld and Eip Growth

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

By analyzing existing cross correlation between Barloworld Ltd ADR and Eip Growth And, you can compare the effects of market volatilities on Barloworld and Eip Growth 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 Barloworld with a short position of Eip Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Eip Growth.

Diversification Opportunities for Barloworld and Eip Growth

-0.02

Correlation Coefficient

Barloworld  Eip Growth

Good diversification

The 3 months correlation between Barloworld and EIP is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Eip Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eip Growth And and Barloworld 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 Barloworld Ltd ADR are associated (or correlated) with Eip Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eip Growth And has no effect on the direction of Barloworld i.e., Barloworld and Eip Growth go up and down completely randomly.

Pair Corralation between Barloworld and Eip Growth

Assuming the 90 days horizon Barloworld Ltd ADR is expected to under-perform the Eip Growth. In addition to that, Barloworld is 4.33 times more volatile than Eip Growth And. It trades about -0.03 of its total potential returns per unit of risk. Eip Growth And is currently generating about 0.11 per unit of volatility. If you would invest  1,760  in Eip Growth And on December 23, 2024 and sell it today you would earn a total of  110.00  from holding Eip Growth And or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

Barloworld Ltd ADR  vs.  Eip Growth And

Barloworld ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Barloworld Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Eip Growth And

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eip Growth And are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Eip Growth may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Barloworld and Eip Growth

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

The idea behind Barloworld Ltd ADR and Eip Growth And 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.