Correlation Between Barings BDC and Victory Integrity
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Victory Integrity 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 Victory Integrity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Victory Integrity Smallmid Cap, you can compare the effects of market volatilities on Barings BDC and Victory Integrity 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 Victory Integrity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Victory Integrity.
Diversification Opportunities for Barings BDC and Victory Integrity
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Victory is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Victory Integrity Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Integrity 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 Victory Integrity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Integrity has no effect on the direction of Barings BDC i.e., Barings BDC and Victory Integrity go up and down completely randomly.
Pair Corralation between Barings BDC and Victory Integrity
Given the investment horizon of 90 days Barings BDC is expected to generate 1.29 times less return on investment than Victory Integrity. But when comparing it to its historical volatility, Barings BDC is 1.12 times less risky than Victory Integrity. It trades about 0.08 of its potential returns per unit of risk. Victory Integrity Smallmid Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,408 in Victory Integrity Smallmid Cap on September 13, 2024 and sell it today you would earn a total of 97.00 from holding Victory Integrity Smallmid Cap or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Barings BDC vs. Victory Integrity Smallmid Cap
Performance |
| Timeline |
| Barings BDC |
| Victory Integrity |
Barings BDC and Victory Integrity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Victory Integrity
The main advantage of trading using opposite Barings BDC and Victory Integrity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Victory Integrity 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 Victory Integrity will offset losses from the drop in Victory Integrity'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 |
| Victory Integrity vs. Ashmore Emerging Markets | Victory Integrity vs. Origin Emerging Markets | Victory Integrity vs. Siit Emerging Markets | Victory Integrity vs. Pnc Emerging Markets |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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