Correlation Between Barloworld and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Barloworld and Europacific Growth 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 Barloworld and Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and Europacific Growth Fund, you can compare the effects of market volatilities on Barloworld and Europacific Growth 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 Barloworld with a short position of Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Europacific Growth.
Diversification Opportunities for Barloworld and Europacific Growth
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barloworld and Europacific is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth and Barloworld 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 Barloworld Ltd ADR are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Barloworld i.e., Barloworld and Europacific Growth go up and down completely randomly.
Pair Corralation between Barloworld and Europacific Growth
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 5.0 times more return on investment than Europacific Growth. However, Barloworld is 5.0 times more volatile than Europacific Growth Fund. It trades about 0.04 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.05 per unit of risk. If you would invest 365.00 in Barloworld Ltd ADR on September 2, 2024 and sell it today you would earn a total of 58.00 from holding Barloworld Ltd ADR or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 70.56% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Europacific Growth Fund
Performance |
| Timeline |
| Barloworld ADR |
| Europacific Growth |
Barloworld and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Europacific Growth
The main advantage of trading using opposite Barloworld and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Europacific Growth vs. Amg Managers Centersquare | Europacific Growth vs. Prudential Real Estate | Europacific Growth vs. Goldman Sachs Real | Europacific Growth vs. Us Real Estate |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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