Correlation Between Barings BDC and China Resources
Can any of the company-specific risk be diversified away by investing in both Barings BDC and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and China Resources Power, you can compare the effects of market volatilities on Barings BDC and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and China Resources.
Diversification Opportunities for Barings BDC and China Resources
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and China is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and China Resources Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Power 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Power has no effect on the direction of Barings BDC i.e., Barings BDC and China Resources go up and down completely randomly.
Pair Corralation between Barings BDC and China Resources
If you would invest 941.00 in Barings BDC on September 5, 2024 and sell it today you would earn a total of 81.00 from holding Barings BDC or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Barings BDC vs. China Resources Power
Performance |
| Timeline |
| Barings BDC |
| China Resources Power |
Barings BDC and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and China Resources
The main advantage of trading using opposite Barings BDC and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
| China Resources vs. CF Industries Holdings | China Resources vs. Aldel Financial II | China Resources vs. Axalta Coating Systems | China Resources vs. Sealed Air |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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