Correlation Between Barloworld and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Barloworld and Guinness Atkinson 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 Guinness Atkinson 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 Guinness Atkinson Global, you can compare the effects of market volatilities on Barloworld and Guinness Atkinson 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 Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Guinness Atkinson.
Diversification Opportunities for Barloworld and Guinness Atkinson
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barloworld and Guinness is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Guinness Atkinson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Global 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 Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Global has no effect on the direction of Barloworld i.e., Barloworld and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Barloworld and Guinness Atkinson
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 7.17 times more return on investment than Guinness Atkinson. However, Barloworld is 7.17 times more volatile than Guinness Atkinson Global. It trades about 0.07 of its potential returns per unit of risk. Guinness Atkinson Global is currently generating about 0.12 per unit of risk. If you would invest 403.00 in Barloworld Ltd ADR on September 1, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Guinness Atkinson Global
Performance |
| Timeline |
| Barloworld ADR |
| Guinness Atkinson Global |
Barloworld and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Guinness Atkinson
The main advantage of trading using opposite Barloworld and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Guinness Atkinson vs. Guinness Atkinson Alternative | Guinness Atkinson vs. Oil Gas Ultrasector | Guinness Atkinson vs. Global Resources Fund | Guinness Atkinson vs. Invesco Energy Fund |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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