Correlation Between Barings BDC and Enova International
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Enova International 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 Enova International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Enova International, you can compare the effects of market volatilities on Barings BDC and Enova International 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 Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Enova International.
Diversification Opportunities for Barings BDC and Enova International
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Enova is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International 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 Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Barings BDC i.e., Barings BDC and Enova International go up and down completely randomly.
Pair Corralation between Barings BDC and Enova International
Given the investment horizon of 90 days Barings BDC is expected to generate 2.25 times less return on investment than Enova International. But when comparing it to its historical volatility, Barings BDC is 1.99 times less risky than Enova International. It trades about 0.07 of its potential returns per unit of risk. Enova International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,875 in Enova International on November 19, 2024 and sell it today you would earn a total of 6,206 from holding Enova International or generate 127.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. Enova International
Performance |
| Timeline |
| Barings BDC |
| Enova International |
Barings BDC and Enova International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Enova International
The main advantage of trading using opposite Barings BDC and Enova International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Enova International 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 Enova International will offset losses from the drop in Enova International'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 |
| Enova International vs. Visa Class A | Enova International vs. PayPal Holdings | Enova International vs. Capital One Financial | Enova International vs. Upstart Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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