Correlation Between Mill City and Barings Participation

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

By analyzing existing cross correlation between Mill City Ventures and Barings Participation Investors, you can compare the effects of market volatilities on Mill City and Barings Participation 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 Mill City with a short position of Barings Participation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and Barings Participation.

Diversification Opportunities for Mill City and Barings Participation

-0.09

Correlation Coefficient

Mill City  Barings Participation

Good diversification

The 3 months correlation between Mill and Barings is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Barings Participation Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Participation and Mill City 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 Mill City Ventures are associated (or correlated) with Barings Participation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Participation has no effect on the direction of Mill City i.e., Mill City and Barings Participation go up and down completely randomly.

Pair Corralation between Mill City and Barings Participation

Given the investment horizon of 90 days Mill City Ventures is expected to under-perform the Barings Participation. In addition to that, Mill City is 4.86 times more volatile than Barings Participation Investors. It trades about -0.33 of its total potential returns per unit of risk. Barings Participation Investors is currently generating about -0.17 per unit of volatility. If you would invest  1,685  in Barings Participation Investors on December 4, 2024 and sell it today you would lose (75.00) from holding Barings Participation Investors or give up 4.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mill City Ventures  vs.  Barings Participation Investor

Mill City Ventures

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mill City Ventures are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mill City unveiled solid returns over the last few months and may actually be approaching a breakup point.

Barings Participation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Barings Participation Investors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Barings Participation is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Mill City and Barings Participation

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

The idea behind Mill City Ventures and Barings Participation Investors 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.