Correlation Between Barings BDC and Chiba Bank
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Chiba Bank 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 Barings BDC and Chiba Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Chiba Bank Ltd, you can compare the effects of market volatilities on Barings BDC and Chiba Bank 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 Barings BDC with a short position of Chiba Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Chiba Bank.
Diversification Opportunities for Barings BDC and Chiba Bank
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and Chiba is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Chiba Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank and Barings BDC 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 Barings BDC are associated (or correlated) with Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of Barings BDC i.e., Barings BDC and Chiba Bank go up and down completely randomly.
Pair Corralation between Barings BDC and Chiba Bank
Given the investment horizon of 90 days Barings BDC is expected to generate 0.37 times more return on investment than Chiba Bank. However, Barings BDC is 2.7 times less risky than Chiba Bank. It trades about 0.07 of its potential returns per unit of risk. Chiba Bank Ltd is currently generating about 0.02 per unit of risk. If you would invest 718.00 in Barings BDC on August 27, 2024 and sell it today you would earn a total of 302.00 from holding Barings BDC or generate 42.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. Chiba Bank Ltd
Performance |
| Timeline |
| Barings BDC |
| Chiba Bank |
Barings BDC and Chiba Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Chiba Bank
The main advantage of trading using opposite Barings BDC and Chiba Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Chiba Bank 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 Chiba Bank will offset losses from the drop in Chiba Bank's long position.| Barings BDC vs. PowerUp Acquisition Corp | Barings BDC vs. Aurora Innovation | Barings BDC vs. HUMANA INC | Barings BDC vs. Aquagold International |
| Chiba Bank vs. First Hawaiian | Chiba Bank vs. Central Pacific Financial | Chiba Bank vs. Territorial Bancorp | Chiba Bank vs. Comerica |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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