Correlation Between Ampleforth and Barloworld
Can any of the company-specific risk be diversified away by investing in both Ampleforth and Barloworld 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 Ampleforth and Barloworld into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampleforth and Barloworld Ltd ADR, you can compare the effects of market volatilities on Ampleforth and Barloworld 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 Ampleforth with a short position of Barloworld. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampleforth and Barloworld.
Diversification Opportunities for Ampleforth and Barloworld
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ampleforth and Barloworld is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ampleforth and Barloworld Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barloworld ADR and Ampleforth 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 Ampleforth are associated (or correlated) with Barloworld. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barloworld ADR has no effect on the direction of Ampleforth i.e., Ampleforth and Barloworld go up and down completely randomly.
Pair Corralation between Ampleforth and Barloworld
Assuming the 90 days trading horizon Ampleforth is expected to generate 1.6 times more return on investment than Barloworld. However, Ampleforth is 1.6 times more volatile than Barloworld Ltd ADR. It trades about 0.06 of its potential returns per unit of risk. Barloworld Ltd ADR is currently generating about -0.1 per unit of risk. If you would invest 116.00 in Ampleforth on November 5, 2024 and sell it today you would earn a total of 5.00 from holding Ampleforth or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Ampleforth vs. Barloworld Ltd ADR
Performance |
| Timeline |
| Ampleforth |
| Barloworld ADR |
Ampleforth and Barloworld Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampleforth and Barloworld
The main advantage of trading using opposite Ampleforth and Barloworld positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampleforth position performs unexpectedly, Barloworld 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 Barloworld will offset losses from the drop in Barloworld's long position.| Ampleforth vs. Staked Ether | Ampleforth vs. Phala Network | Ampleforth vs. EigenLayer | Ampleforth vs. EOSDAC |
| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
Check out your portfolio center.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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