Correlation Between Barings BDC and Everus Construction
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Everus Construction 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 Everus Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Everus Construction Group, you can compare the effects of market volatilities on Barings BDC and Everus Construction 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 Everus Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Everus Construction.
Diversification Opportunities for Barings BDC and Everus Construction
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barings and Everus is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Everus Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everus Construction 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 Everus Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everus Construction has no effect on the direction of Barings BDC i.e., Barings BDC and Everus Construction go up and down completely randomly.
Pair Corralation between Barings BDC and Everus Construction
Given the investment horizon of 90 days Barings BDC is expected to generate 1.27 times less return on investment than Everus Construction. But when comparing it to its historical volatility, Barings BDC is 3.19 times less risky than Everus Construction. It trades about 0.18 of its potential returns per unit of risk. Everus Construction Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,385 in Everus Construction Group on September 12, 2024 and sell it today you would earn a total of 231.00 from holding Everus Construction Group or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. Everus Construction Group
Performance |
| Timeline |
| Barings BDC |
| Everus Construction |
Barings BDC and Everus Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Everus Construction
The main advantage of trading using opposite Barings BDC and Everus Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Everus Construction 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 Everus Construction will offset losses from the drop in Everus Construction's long position.| Barings BDC vs. Victory Integrity Smallmid Cap | Barings BDC vs. Hilton Worldwide Holdings | Barings BDC vs. NVIDIA | Barings BDC vs. JPMorgan Chase Co |
| Everus Construction vs. Here Media | Everus Construction vs. Sphere Entertainment Co | Everus Construction vs. Nok Airlines Public | Everus Construction vs. Dave Busters Entertainment |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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