Correlation Between Barings BDC and Proficient Auto
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Proficient Auto 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 Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Proficient Auto Logistics,, you can compare the effects of market volatilities on Barings BDC and Proficient Auto 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 Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Proficient Auto.
Diversification Opportunities for Barings BDC and Proficient Auto
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Proficient is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi 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 Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of Barings BDC i.e., Barings BDC and Proficient Auto go up and down completely randomly.
Pair Corralation between Barings BDC and Proficient Auto
Given the investment horizon of 90 days Barings BDC is expected to generate 7.51 times less return on investment than Proficient Auto. But when comparing it to its historical volatility, Barings BDC is 3.36 times less risky than Proficient Auto. It trades about 0.25 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 784.00 in Proficient Auto Logistics, on October 25, 2024 and sell it today you would earn a total of 256.00 from holding Proficient Auto Logistics, or generate 32.65% 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. Proficient Auto Logistics,
Performance |
| Timeline |
| Barings BDC |
| Proficient Auto Logi |
Barings BDC and Proficient Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Proficient Auto
The main advantage of trading using opposite Barings BDC and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Proficient Auto 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 Proficient Auto will offset losses from the drop in Proficient Auto'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 |
| Proficient Auto vs. Boot Barn Holdings | Proficient Auto vs. The Cheesecake Factory | Proficient Auto vs. Columbia Sportswear | Proficient Auto vs. Tandy Leather Factory |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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