Correlation Between Barloworld and Redwood Managed
Can any of the company-specific risk be diversified away by investing in both Barloworld and Redwood Managed 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 Redwood Managed 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 Redwood Managed Volatility, you can compare the effects of market volatilities on Barloworld and Redwood Managed 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 Redwood Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Redwood Managed.
Diversification Opportunities for Barloworld and Redwood Managed
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barloworld and Redwood is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Redwood Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwood Managed Vola 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 Redwood Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwood Managed Vola has no effect on the direction of Barloworld i.e., Barloworld and Redwood Managed go up and down completely randomly.
Pair Corralation between Barloworld and Redwood Managed
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 45.69 times more return on investment than Redwood Managed. However, Barloworld is 45.69 times more volatile than Redwood Managed Volatility. It trades about 0.07 of its potential returns per unit of risk. Redwood Managed Volatility is currently generating about 0.4 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 | 95.45% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Redwood Managed Volatility
Performance |
| Timeline |
| Barloworld ADR |
| Redwood Managed Vola |
Barloworld and Redwood Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Redwood Managed
The main advantage of trading using opposite Barloworld and Redwood Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Redwood Managed 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 Redwood Managed will offset losses from the drop in Redwood Managed's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Redwood Managed vs. Redwood Managed Municipal | Redwood Managed vs. Redwood Systematic Macro | Redwood Managed vs. Redwood Alphafactor Tactical | Redwood Managed vs. LeaderSharesTM AlphaFactor Core |
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.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |