Correlation Between Barings BDC and Mitsubishi Estate
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Mitsubishi Estate 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 Mitsubishi Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Mitsubishi Estate Co, you can compare the effects of market volatilities on Barings BDC and Mitsubishi Estate 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 Mitsubishi Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Mitsubishi Estate.
Diversification Opportunities for Barings BDC and Mitsubishi Estate
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barings and Mitsubishi is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Mitsubishi Estate Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Estate 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 Mitsubishi Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Estate has no effect on the direction of Barings BDC i.e., Barings BDC and Mitsubishi Estate go up and down completely randomly.
Pair Corralation between Barings BDC and Mitsubishi Estate
Given the investment horizon of 90 days Barings BDC is expected to generate 0.38 times more return on investment than Mitsubishi Estate. However, Barings BDC is 2.63 times less risky than Mitsubishi Estate. It trades about 0.1 of its potential returns per unit of risk. Mitsubishi Estate Co is currently generating about 0.02 per unit of risk. If you would invest 806.00 in Barings BDC on September 3, 2024 and sell it today you would earn a total of 227.00 from holding Barings BDC or generate 28.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 64.37% |
| Values | Daily Returns |
Barings BDC vs. Mitsubishi Estate Co
Performance |
| Timeline |
| Barings BDC |
| Mitsubishi Estate |
Barings BDC and Mitsubishi Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Mitsubishi Estate
The main advantage of trading using opposite Barings BDC and Mitsubishi Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Mitsubishi Estate 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 Mitsubishi Estate will offset losses from the drop in Mitsubishi Estate'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 |
| Mitsubishi Estate vs. St Joe Company | Mitsubishi Estate vs. Secom Co Ltd | Mitsubishi Estate vs. Daiwa House Industry | Mitsubishi Estate vs. Henderson Land Development |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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