Correlation Between Barloworld and Mainstay Growth
Can any of the company-specific risk be diversified away by investing in both Barloworld and Mainstay Growth 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 Mainstay Growth 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 Mainstay Growth Etf, you can compare the effects of market volatilities on Barloworld and Mainstay Growth 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 Mainstay Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Mainstay Growth.
Diversification Opportunities for Barloworld and Mainstay Growth
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barloworld and Mainstay is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Mainstay Growth Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Growth Etf 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 Mainstay Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Growth Etf has no effect on the direction of Barloworld i.e., Barloworld and Mainstay Growth go up and down completely randomly.
Pair Corralation between Barloworld and Mainstay Growth
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 9.6 times more return on investment than Mainstay Growth. However, Barloworld is 9.6 times more volatile than Mainstay Growth Etf. It trades about 0.07 of its potential returns per unit of risk. Mainstay Growth Etf is currently generating about 0.33 per unit of risk. If you would invest 403.00 in Barloworld Ltd ADR on September 1, 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. Mainstay Growth Etf
Performance |
| Timeline |
| Barloworld ADR |
| Mainstay Growth Etf |
Barloworld and Mainstay Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Mainstay Growth
The main advantage of trading using opposite Barloworld and Mainstay Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Mainstay Growth 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 Mainstay Growth will offset losses from the drop in Mainstay Growth's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Mainstay Growth vs. Victory Rs Small | Mainstay Growth vs. Chase Growth Fund | Mainstay Growth vs. Small Pany Growth | Mainstay Growth vs. Artisan Small Cap |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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