Correlation Between Barclays Capital and GRI Bio

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

By analyzing existing cross correlation between Barclays Capital and GRI Bio, you can compare the effects of market volatilities on Barclays Capital and GRI Bio 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 Barclays Capital with a short position of GRI Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and GRI Bio.

Diversification Opportunities for Barclays Capital and GRI Bio

0.42

Correlation Coefficient

Barclays Capital  GRI Bio

Very weak diversification

The 3 months correlation between Barclays and GRI is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and GRI Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRI Bio and Barclays Capital 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 Barclays Capital are associated (or correlated) with GRI Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRI Bio has no effect on the direction of Barclays Capital i.e., Barclays Capital and GRI Bio go up and down completely randomly.

Pair Corralation between Barclays Capital and GRI Bio

If you would invest  64.00  in GRI Bio on September 21, 2024 and sell it today you would earn a total of  13.10  from holding GRI Bio or generate 20.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	9.09%
Values	Daily Returns

Barclays Capital  vs.  GRI Bio

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Barclays Capital is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

GRI Bio

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GRI Bio are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, GRI Bio demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barclays Capital and GRI Bio

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

The idea behind Barclays Capital and GRI Bio 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.