Correlation Between Barloworld and Graphene Manufacturing
Can any of the company-specific risk be diversified away by investing in both Barloworld and Graphene Manufacturing 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 Graphene Manufacturing 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 Graphene Manufacturing Group, you can compare the effects of market volatilities on Barloworld and Graphene Manufacturing 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 Graphene Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Graphene Manufacturing.
Diversification Opportunities for Barloworld and Graphene Manufacturing
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barloworld and Graphene is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Graphene Manufacturing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphene Manufacturing 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 Graphene Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphene Manufacturing has no effect on the direction of Barloworld i.e., Barloworld and Graphene Manufacturing go up and down completely randomly.
Pair Corralation between Barloworld and Graphene Manufacturing
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 1.13 times more return on investment than Graphene Manufacturing. However, Barloworld is 1.13 times more volatile than Graphene Manufacturing Group. It trades about 0.07 of its potential returns per unit of risk. Graphene Manufacturing Group is currently generating about -0.04 per unit of risk. If you would invest 403.00 in Barloworld Ltd ADR on August 30, 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. Graphene Manufacturing Group
Performance |
| Timeline |
| Barloworld ADR |
| Graphene Manufacturing |
Barloworld and Graphene Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Graphene Manufacturing
The main advantage of trading using opposite Barloworld and Graphene Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Graphene Manufacturing 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 Graphene Manufacturing will offset losses from the drop in Graphene Manufacturing's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Graphene Manufacturing vs. Akzo Nobel NV | Graphene Manufacturing vs. Avoca LLC | Graphene Manufacturing vs. Arkema SA ADR | Graphene Manufacturing vs. HUMANA INC |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |