Correlation Between Barclays PLC and FibroGen
Can any of the company-specific risk be diversified away by investing in both Barclays PLC and FibroGen 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 Barclays PLC and FibroGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays PLC and FibroGen, you can compare the effects of market volatilities on Barclays PLC and FibroGen 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 Barclays PLC with a short position of FibroGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays PLC and FibroGen.
Diversification Opportunities for Barclays PLC and FibroGen
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barclays and FibroGen is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Barclays PLC and FibroGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibroGen and Barclays PLC 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 Barclays PLC are associated (or correlated) with FibroGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibroGen has no effect on the direction of Barclays PLC i.e., Barclays PLC and FibroGen go up and down completely randomly.
Pair Corralation between Barclays PLC and FibroGen
Assuming the 90 days trading horizon Barclays PLC is expected to generate 0.23 times more return on investment than FibroGen. However, Barclays PLC is 4.35 times less risky than FibroGen. It trades about 0.15 of its potential returns per unit of risk. FibroGen is currently generating about 0.03 per unit of risk. If you would invest 13,014 in Barclays PLC on November 9, 2024 and sell it today you would earn a total of 17,486 from holding Barclays PLC or generate 134.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays PLC vs. FibroGen
Performance |
| Timeline |
| Barclays PLC |
| FibroGen |
Barclays PLC and FibroGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays PLC and FibroGen
The main advantage of trading using opposite Barclays PLC and FibroGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays PLC position performs unexpectedly, FibroGen 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 FibroGen will offset losses from the drop in FibroGen's long position.| Barclays PLC vs. Deutsche Bank Aktiengesellschaft | Barclays PLC vs. Genworth Financial | Barclays PLC vs. McEwen Mining | Barclays PLC vs. Prudential Financial |
| FibroGen vs. GMxico Transportes SAB | FibroGen vs. Grupo Hotelero Santa | FibroGen vs. Grupo Carso SAB | FibroGen vs. Cognizant Technology Solutions |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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