Correlation Between Barloworld and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Barloworld and Inflection Point 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 Inflection Point 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 Inflection Point Acquisition, you can compare the effects of market volatilities on Barloworld and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Inflection Point.
Diversification Opportunities for Barloworld and Inflection Point
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barloworld and Inflection is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Barloworld i.e., Barloworld and Inflection Point go up and down completely randomly.
Pair Corralation between Barloworld and Inflection Point
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 11.65 times more return on investment than Inflection Point. However, Barloworld is 11.65 times more volatile than Inflection Point Acquisition. It trades about 0.02 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.06 per unit of risk. If you would invest 436.00 in Barloworld Ltd ADR on September 1, 2024 and sell it today you would lose (13.00) from holding Barloworld Ltd ADR or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.1% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Inflection Point Acquisition
Performance |
| Timeline |
| Barloworld ADR |
| Inflection Point Acq |
Barloworld and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Inflection Point
The main advantage of trading using opposite Barloworld and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Inflection Point vs. Aterian | Inflection Point vs. Church Dwight | Inflection Point vs. Mannatech Incorporated | Inflection Point vs. Saia 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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