Correlation Between Barclays Capital and VanEck Natural
Can any of the company-specific risk be diversified away by investing in both Barclays Capital and VanEck Natural 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 Barclays Capital and VanEck Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and VanEck Natural Resources, you can compare the effects of market volatilities on Barclays Capital and VanEck Natural 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 Barclays Capital with a short position of VanEck Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and VanEck Natural.
Diversification Opportunities for Barclays Capital and VanEck Natural
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barclays and VanEck is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and VanEck Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Natural Resources and Barclays Capital 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 Barclays Capital are associated (or correlated) with VanEck Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Natural Resources has no effect on the direction of Barclays Capital i.e., Barclays Capital and VanEck Natural go up and down completely randomly.
Pair Corralation between Barclays Capital and VanEck Natural
If you would invest 5,101 in VanEck Natural Resources on September 3, 2024 and sell it today you would lose (3.00) from holding VanEck Natural Resources or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Barclays Capital vs. VanEck Natural Resources
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VanEck Natural Resources |
Barclays Capital and VanEck Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and VanEck Natural
The main advantage of trading using opposite Barclays Capital and VanEck Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, VanEck Natural 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 VanEck Natural will offset losses from the drop in VanEck Natural's long position.| Barclays Capital vs. Vanguard Total Stock | Barclays Capital vs. SPDR SP 500 | Barclays Capital vs. Vanguard Total Bond | Barclays Capital vs. Vanguard Value Index |
| VanEck Natural vs. Invesco MSCI Global | VanEck Natural vs. WisdomTree Continuous Commodity | VanEck Natural vs. VanEck UraniumNuclear Energy | VanEck Natural vs. SPDR SP Global |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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