Correlation Between EnVVeno Medical and Barings BDC

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Can any of the company-specific risk be diversified away by investing in both EnVVeno Medical and Barings BDC 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 EnVVeno Medical and Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between enVVeno Medical Corp and Barings BDC, you can compare the effects of market volatilities on EnVVeno Medical and Barings BDC 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 EnVVeno Medical with a short position of Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnVVeno Medical and Barings BDC.

Diversification Opportunities for EnVVeno Medical and Barings BDC

-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between EnVVeno and Barings is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding enVVeno Medical Corp and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC and EnVVeno Medical 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 enVVeno Medical Corp are associated (or correlated) with Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of EnVVeno Medical i.e., EnVVeno Medical and Barings BDC go up and down completely randomly.

Pair Corralation between EnVVeno Medical and Barings BDC

Given the investment horizon of 90 days enVVeno Medical Corp is expected to under-perform the Barings BDC. In addition to that, EnVVeno Medical is 3.82 times more volatile than Barings BDC. It trades about -0.23 of its total potential returns per unit of risk. Barings BDC is currently generating about -0.17 per unit of volatility. If you would invest  975.00  in Barings BDC on September 19, 2024 and sell it today you would lose (32.50) from holding Barings BDC or give up 3.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

enVVeno Medical Corp  vs.  Barings BDC

 Performance 
       Timeline  
enVVeno Medical Corp 

Risk-Adjusted Performance

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Over the last 90 days enVVeno Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Barings BDC 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Barings BDC has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

EnVVeno Medical and Barings BDC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EnVVeno Medical and Barings BDC

The main advantage of trading using opposite EnVVeno Medical and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnVVeno Medical position performs unexpectedly, Barings BDC 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 BDC will offset losses from the drop in Barings BDC's long position.
The idea behind enVVeno Medical Corp and Barings BDC 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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