Correlation Between Barings BDC and OneMain Holdings
Can any of the company-specific risk be diversified away by investing in both Barings BDC and OneMain Holdings 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 OneMain Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and OneMain Holdings, you can compare the effects of market volatilities on Barings BDC and OneMain Holdings 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 OneMain Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and OneMain Holdings.
Diversification Opportunities for Barings BDC and OneMain Holdings
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and OneMain is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and OneMain Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneMain Holdings 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 OneMain Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneMain Holdings has no effect on the direction of Barings BDC i.e., Barings BDC and OneMain Holdings go up and down completely randomly.
Pair Corralation between Barings BDC and OneMain Holdings
Given the investment horizon of 90 days Barings BDC is expected to generate 1.72 times less return on investment than OneMain Holdings. But when comparing it to its historical volatility, Barings BDC is 1.82 times less risky than OneMain Holdings. It trades about 0.09 of its potential returns per unit of risk. OneMain Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,892 in OneMain Holdings on August 26, 2024 and sell it today you would earn a total of 1,768 from holding OneMain Holdings or generate 45.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. OneMain Holdings
Performance |
| Timeline |
| Barings BDC |
| OneMain Holdings |
Barings BDC and OneMain Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and OneMain Holdings
The main advantage of trading using opposite Barings BDC and OneMain Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, OneMain Holdings 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 OneMain Holdings will offset losses from the drop in OneMain Holdings' long position.| Barings BDC vs. PowerUp Acquisition Corp | Barings BDC vs. Aurora Innovation | Barings BDC vs. HUMANA INC | Barings BDC vs. Aquagold International |
| OneMain Holdings vs. Oaktree Specialty Lending | OneMain Holdings vs. Barings BDC | OneMain Holdings vs. Runway Growth Finance | OneMain Holdings vs. Ally Financial |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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