Correlation Between Barloworld and Global Star
Can any of the company-specific risk be diversified away by investing in both Barloworld and Global Star 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 Global Star 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 Global Star Acquisition,, you can compare the effects of market volatilities on Barloworld and Global Star 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 Global Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Global Star.
Diversification Opportunities for Barloworld and Global Star
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barloworld and Global is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Global Star Acquisition, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Star Acquisition, 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 Global Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Star Acquisition, has no effect on the direction of Barloworld i.e., Barloworld and Global Star go up and down completely randomly.
Pair Corralation between Barloworld and Global Star
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 6.62 times more return on investment than Global Star. However, Barloworld is 6.62 times more volatile than Global Star Acquisition,. It trades about 0.22 of its potential returns per unit of risk. Global Star Acquisition, is currently generating about 0.01 per unit of risk. If you would invest 423.00 in Barloworld Ltd ADR on September 13, 2024 and sell it today you would earn a total of 202.00 from holding Barloworld Ltd ADR or generate 47.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Global Star Acquisition,
Performance |
| Timeline |
| Barloworld ADR |
| Global Star Acquisition, |
Barloworld and Global Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Global Star
The main advantage of trading using opposite Barloworld and Global Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Global Star 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 Global Star will offset losses from the drop in Global Star's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Global Star vs. Visa Class A | Global Star vs. Diamond Hill Investment | Global Star vs. Distoken Acquisition | Global Star vs. AllianceBernstein Holding LP |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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