Correlation Between Barloworld and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Barloworld and Nebraska Municipal 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 Nebraska Municipal 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 Nebraska Municipal Fund, you can compare the effects of market volatilities on Barloworld and Nebraska Municipal 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 Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Nebraska Municipal.
Diversification Opportunities for Barloworld and Nebraska Municipal
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barloworld and NEBRASKA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal 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 Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Barloworld i.e., Barloworld and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Barloworld and Nebraska Municipal
Assuming the 90 days horizon Barloworld Ltd ADR is expected to under-perform the Nebraska Municipal. In addition to that, Barloworld is 12.87 times more volatile than Nebraska Municipal Fund. It trades about -0.01 of its total potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.11 per unit of volatility. If you would invest 910.00 in Nebraska Municipal Fund on August 29, 2024 and sell it today you would earn a total of 33.00 from holding Nebraska Municipal Fund or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Nebraska Municipal Fund
Performance |
| Timeline |
| Barloworld ADR |
| Nebraska Municipal |
Barloworld and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Nebraska Municipal
The main advantage of trading using opposite Barloworld and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Nebraska Municipal 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Nebraska Municipal vs. Virginia Bond Fund | Nebraska Municipal vs. HUMANA INC | Nebraska Municipal vs. Aquagold International | Nebraska Municipal vs. Barloworld Ltd ADR |
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.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |