Correlation Between Barloworld and Live Oak
Can any of the company-specific risk be diversified away by investing in both Barloworld and Live Oak 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 Live Oak 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 Live Oak Health, you can compare the effects of market volatilities on Barloworld and Live Oak 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 Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Live Oak.
Diversification Opportunities for Barloworld and Live Oak
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barloworld and Live is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health 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 Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Barloworld i.e., Barloworld and Live Oak go up and down completely randomly.
Pair Corralation between Barloworld and Live Oak
Assuming the 90 days horizon Barloworld Ltd ADR is expected to under-perform the Live Oak. In addition to that, Barloworld is 4.49 times more volatile than Live Oak Health. It trades about -0.01 of its total potential returns per unit of risk. Live Oak Health is currently generating about 0.05 per unit of volatility. If you would invest 2,116 in Live Oak Health on September 1, 2024 and sell it today you would earn a total of 96.00 from holding Live Oak Health or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Live Oak Health
Performance |
| Timeline |
| Barloworld ADR |
| Live Oak Health |
Barloworld and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Live Oak
The main advantage of trading using opposite Barloworld and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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