Correlation Between Barloworld and Great Elm
Can any of the company-specific risk be diversified away by investing in both Barloworld and Great Elm 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 Great Elm 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 Great Elm Capital, you can compare the effects of market volatilities on Barloworld and Great Elm 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 Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Great Elm.
Diversification Opportunities for Barloworld and Great Elm
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barloworld and Great is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital 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 Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of Barloworld i.e., Barloworld and Great Elm go up and down completely randomly.
Pair Corralation between Barloworld and Great Elm
Assuming the 90 days horizon Barloworld Ltd ADR is expected to under-perform the Great Elm. In addition to that, Barloworld is 5.27 times more volatile than Great Elm Capital. It trades about -0.14 of its total potential returns per unit of risk. Great Elm Capital is currently generating about 0.01 per unit of volatility. If you would invest 2,499 in Great Elm Capital on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Great Elm Capital or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Great Elm Capital
Performance |
| Timeline |
| Barloworld ADR |
| Great Elm Capital |
Barloworld and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Great Elm
The main advantage of trading using opposite Barloworld and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |