Correlation Between Barings BDC and Magnite
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Magnite 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 Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Magnite, you can compare the effects of market volatilities on Barings BDC and Magnite 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 Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Magnite.
Diversification Opportunities for Barings BDC and Magnite
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Magnite is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite 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 Magnite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnite has no effect on the direction of Barings BDC i.e., Barings BDC and Magnite go up and down completely randomly.
Pair Corralation between Barings BDC and Magnite
Given the investment horizon of 90 days Barings BDC is expected to generate 1.95 times less return on investment than Magnite. But when comparing it to its historical volatility, Barings BDC is 3.64 times less risky than Magnite. It trades about 0.1 of its potential returns per unit of risk. Magnite is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 917.00 in Magnite on November 27, 2024 and sell it today you would earn a total of 852.00 from holding Magnite or generate 92.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. Magnite
Performance |
| Timeline |
| Barings BDC |
| Magnite |
Barings BDC and Magnite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Magnite
The main advantage of trading using opposite Barings BDC and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Magnite 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 Magnite will offset losses from the drop in Magnite'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 |
| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Criteo Sa |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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