Correlation Between Barclays Capital and Teucrium Sugar

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

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

Diversification Opportunities for Barclays Capital and Teucrium Sugar

-0.27

Correlation Coefficient

Barclays Capital  Teucrium Sugar

Very good diversification

The 3 months correlation between Barclays and Teucrium is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and Teucrium Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teucrium Sugar 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 Teucrium Sugar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teucrium Sugar has no effect on the direction of Barclays Capital i.e., Barclays Capital and Teucrium Sugar go up and down completely randomly.

Pair Corralation between Barclays Capital and Teucrium Sugar

Allowing for the 90-day total investment horizon Barclays Capital is expected to generate 1.22 times more return on investment than Teucrium Sugar. However, Barclays Capital is 1.22 times more volatile than Teucrium Sugar. It trades about 0.04 of its potential returns per unit of risk. Teucrium Sugar is currently generating about 0.04 per unit of risk. If you would invest  4,945  in Barclays Capital on September 18, 2024 and sell it today you would earn a total of  455.00  from holding Barclays Capital or generate 9.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	28.69%
Values	Daily Returns

Barclays Capital  vs.  Teucrium Sugar

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 very healthy basic indicators, Barclays Capital is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Teucrium Sugar

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Barclays Capital and Teucrium Sugar

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

The idea behind Barclays Capital and Teucrium Sugar 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.