Correlation Between Barloworld and Mynaric AG
Can any of the company-specific risk be diversified away by investing in both Barloworld and Mynaric AG 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 Mynaric AG 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 Mynaric AG ADR, you can compare the effects of market volatilities on Barloworld and Mynaric AG 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 Mynaric AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Mynaric AG.
Diversification Opportunities for Barloworld and Mynaric AG
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barloworld and Mynaric is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Mynaric AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mynaric AG ADR 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 Mynaric AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mynaric AG ADR has no effect on the direction of Barloworld i.e., Barloworld and Mynaric AG go up and down completely randomly.
Pair Corralation between Barloworld and Mynaric AG
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 1.36 times more return on investment than Mynaric AG. However, Barloworld is 1.36 times more volatile than Mynaric AG ADR. It trades about 0.03 of its potential returns per unit of risk. Mynaric AG ADR is currently generating about 0.0 per unit of risk. If you would invest 581.00 in Barloworld Ltd ADR on August 28, 2024 and sell it today you would lose (158.00) from holding Barloworld Ltd ADR or give up 27.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.52% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Mynaric AG ADR
Performance |
| Timeline |
| Barloworld ADR |
| Mynaric AG ADR |
Barloworld and Mynaric AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Mynaric AG
The main advantage of trading using opposite Barloworld and Mynaric AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Mynaric AG 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 Mynaric AG will offset losses from the drop in Mynaric AG's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
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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.
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