Correlation Between Barloworld and One Liberty
Can any of the company-specific risk be diversified away by investing in both Barloworld and One Liberty 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 One Liberty 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 One Liberty Properties, you can compare the effects of market volatilities on Barloworld and One Liberty 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 One Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and One Liberty.
Diversification Opportunities for Barloworld and One Liberty
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barloworld and One is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of Barloworld i.e., Barloworld and One Liberty go up and down completely randomly.
Pair Corralation between Barloworld and One Liberty
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 3.5 times more return on investment than One Liberty. However, Barloworld is 3.5 times more volatile than One Liberty Properties. It trades about 0.07 of its potential returns per unit of risk. One Liberty Properties is currently generating about 0.19 per unit of risk. If you would invest 403.00 in Barloworld Ltd ADR on August 27, 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. One Liberty Properties
Performance |
| Timeline |
| Barloworld ADR |
| One Liberty Properties |
Barloworld and One Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and One Liberty
The main advantage of trading using opposite Barloworld and One Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, One Liberty 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 One Liberty will offset losses from the drop in One Liberty's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| One Liberty vs. Generationome Properties | One Liberty vs. Modiv Inc | One Liberty vs. Armada Hflr Pr | One Liberty vs. NexPoint Diversified Real |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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