Correlation Between Aston Martin and Barloworld
Can any of the company-specific risk be diversified away by investing in both Aston Martin 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 Aston Martin and Barloworld into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and Barloworld Ltd ADR, you can compare the effects of market volatilities on Aston Martin 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 Aston Martin with a short position of Barloworld. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and Barloworld.
Diversification Opportunities for Aston Martin and Barloworld
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aston and Barloworld is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and Barloworld Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barloworld ADR and Aston Martin 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 Aston Martin Lagonda 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 Aston Martin i.e., Aston Martin and Barloworld go up and down completely randomly.
Pair Corralation between Aston Martin and Barloworld
Assuming the 90 days horizon Aston Martin Lagonda is expected to generate 0.52 times more return on investment than Barloworld. However, Aston Martin Lagonda is 1.93 times less risky than Barloworld. It trades about 0.01 of its potential returns per unit of risk. Barloworld Ltd ADR is currently generating about -0.07 per unit of risk. If you would invest 129.00 in Aston Martin Lagonda on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Aston Martin Lagonda or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aston Martin Lagonda vs. Barloworld Ltd ADR
Performance |
| Timeline |
| Aston Martin Lagonda |
| Barloworld ADR |
Aston Martin and Barloworld Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and Barloworld
The main advantage of trading using opposite Aston Martin and Barloworld positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin 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.| Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Guangzhou Automobile Group | Aston Martin vs. Dowlais Group plc | Aston Martin vs. NFI Group |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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