Correlation Between Barings BDC and Coty
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Coty 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 Coty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Coty Inc, you can compare the effects of market volatilities on Barings BDC and Coty 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 Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Coty.
Diversification Opportunities for Barings BDC and Coty
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Coty is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc 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 Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Barings BDC i.e., Barings BDC and Coty go up and down completely randomly.
Pair Corralation between Barings BDC and Coty
Given the investment horizon of 90 days Barings BDC is expected to generate 1.79 times less return on investment than Coty. But when comparing it to its historical volatility, Barings BDC is 2.23 times less risky than Coty. It trades about 0.25 of its potential returns per unit of risk. Coty Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 681.00 in Coty Inc on November 4, 2024 and sell it today you would earn a total of 52.00 from holding Coty Inc or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. Coty Inc
Performance |
| Timeline |
| Barings BDC |
| Coty Inc |
Barings BDC and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Coty
The main advantage of trading using opposite Barings BDC and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Directory Find actively traded commodities issued by global exchanges |