Correlation Between Barloworld and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Barloworld and IShares MSCI 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 IShares MSCI 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 iShares MSCI Hong, you can compare the effects of market volatilities on Barloworld and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and IShares MSCI.
Diversification Opportunities for Barloworld and IShares MSCI
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barloworld and IShares is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and iShares MSCI Hong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Hong 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Hong has no effect on the direction of Barloworld i.e., Barloworld and IShares MSCI go up and down completely randomly.
Pair Corralation between Barloworld and IShares MSCI
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 4.53 times more return on investment than IShares MSCI. However, Barloworld is 4.53 times more volatile than iShares MSCI Hong. It trades about 0.07 of its potential returns per unit of risk. iShares MSCI Hong is currently generating about -0.25 per unit of risk. If you would invest 403.00 in Barloworld Ltd ADR on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Barloworld Ltd ADR or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. iShares MSCI Hong
Performance |
| Timeline |
| Barloworld ADR |
| iShares MSCI Hong |
Barloworld and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and IShares MSCI
The main advantage of trading using opposite Barloworld and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| IShares MSCI vs. iShares MSCI Singapore | IShares MSCI vs. iShares MSCI Taiwan | IShares MSCI vs. iShares MSCI Malaysia | IShares MSCI vs. iShares MSCI Australia |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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