Correlation Between Barings BDC and Univest Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Univest Pennsylvania 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 Univest Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Univest Pennsylvania, you can compare the effects of market volatilities on Barings BDC and Univest Pennsylvania 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 Univest Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Univest Pennsylvania.
Diversification Opportunities for Barings BDC and Univest Pennsylvania
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Univest is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania 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 Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of Barings BDC i.e., Barings BDC and Univest Pennsylvania go up and down completely randomly.
Pair Corralation between Barings BDC and Univest Pennsylvania
Given the investment horizon of 90 days Barings BDC is expected to generate 2.56 times less return on investment than Univest Pennsylvania. But when comparing it to its historical volatility, Barings BDC is 2.93 times less risky than Univest Pennsylvania. It trades about 0.24 of its potential returns per unit of risk. Univest Pennsylvania is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,763 in Univest Pennsylvania on September 1, 2024 and sell it today you would earn a total of 413.00 from holding Univest Pennsylvania or generate 14.95% 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. Univest Pennsylvania
Performance |
| Timeline |
| Barings BDC |
| Univest Pennsylvania |
Barings BDC and Univest Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Univest Pennsylvania
The main advantage of trading using opposite Barings BDC and Univest Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Univest Pennsylvania 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 Univest Pennsylvania will offset losses from the drop in Univest Pennsylvania's long position.| Barings BDC vs. Visa Class A | Barings BDC vs. Diamond Hill Investment | Barings BDC vs. Distoken Acquisition | Barings BDC vs. Associated Capital Group |
| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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