Correlation Between 04685A2U4 and Barings BDC

Can any of the company-specific risk be diversified away by investing in both 04685A2U4 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 04685A2U4 and Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATH 145 08 JAN 26 and Barings BDC, you can compare the effects of market volatilities on 04685A2U4 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 04685A2U4 with a short position of Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of 04685A2U4 and Barings BDC.

Diversification Opportunities for 04685A2U4 and Barings BDC

0.27

Correlation Coefficient

04685A2U4  Barings BDC

Modest diversification

The 3 months correlation between 04685A2U4 and Barings is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ATH 145 08 JAN 26 and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC and 04685A2U4 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 ATH 145 08 JAN 26 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 04685A2U4 i.e., 04685A2U4 and Barings BDC go up and down completely randomly.

Pair Corralation between 04685A2U4 and Barings BDC

Assuming the 90 days trading horizon ATH 145 08 JAN 26 is expected to under-perform the Barings BDC. In addition to that, 04685A2U4 is 2.47 times more volatile than Barings BDC. It trades about -0.25 of its total potential returns per unit of risk. Barings BDC is currently generating about -0.27 per unit of volatility. If you would invest  994.00  in Barings BDC on September 26, 2024 and sell it today you would lose (52.00) from holding Barings BDC or give up 5.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	61.9%
Values	Daily Returns

ATH 145 08 JAN 26  vs.  Barings BDC

ATH 145 08

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATH 145 08 JAN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for ATH 145 08 JAN 26 investors.

Barings BDC

Risk-Adjusted Performance

0 of 100

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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with 04685A2U4 and Barings BDC

The main advantage of trading using opposite 04685A2U4 and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 04685A2U4 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 ATH 145 08 JAN 26 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.