Correlation Between Barings BDC and VS Media
Can any of the company-specific risk be diversified away by investing in both Barings BDC and VS Media 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 VS Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and VS Media Holdings, you can compare the effects of market volatilities on Barings BDC and VS Media 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 VS Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and VS Media.
Diversification Opportunities for Barings BDC and VS Media
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and VSME is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and VS Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VS Media 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 VS Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VS Media Holdings has no effect on the direction of Barings BDC i.e., Barings BDC and VS Media go up and down completely randomly.
Pair Corralation between Barings BDC and VS Media
Given the investment horizon of 90 days Barings BDC is expected to generate 2.07 times less return on investment than VS Media. But when comparing it to its historical volatility, Barings BDC is 6.51 times less risky than VS Media. It trades about 0.24 of its potential returns per unit of risk. VS Media Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 110.00 in VS Media Holdings on September 1, 2024 and sell it today you would earn a total of 8.00 from holding VS Media Holdings or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. VS Media Holdings
Performance |
| Timeline |
| Barings BDC |
| VS Media Holdings |
Barings BDC and VS Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and VS Media
The main advantage of trading using opposite Barings BDC and VS Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, VS Media 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 VS Media will offset losses from the drop in VS Media'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 |
| VS Media vs. MYR Group | VS Media vs. Zoom Video Communications | VS Media vs. Barings BDC | VS Media vs. Chart Industries |
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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