Correlation Between Barloworld and Nasdaq-100 Fund
Can any of the company-specific risk be diversified away by investing in both Barloworld and Nasdaq-100 Fund 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 Nasdaq-100 Fund 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 Nasdaq 100 Fund Class, you can compare the effects of market volatilities on Barloworld and Nasdaq-100 Fund 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 Nasdaq-100 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Nasdaq-100 Fund.
Diversification Opportunities for Barloworld and Nasdaq-100 Fund
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barloworld and Nasdaq-100 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Nasdaq 100 Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Fund 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 Nasdaq-100 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Fund has no effect on the direction of Barloworld i.e., Barloworld and Nasdaq-100 Fund go up and down completely randomly.
Pair Corralation between Barloworld and Nasdaq-100 Fund
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 6.57 times more return on investment than Nasdaq-100 Fund. However, Barloworld is 6.57 times more volatile than Nasdaq 100 Fund Class. It trades about 0.03 of its potential returns per unit of risk. Nasdaq 100 Fund Class is currently generating about 0.09 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 | Insignificant |
| Accuracy | 71.52% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Nasdaq 100 Fund Class
Performance |
| Timeline |
| Barloworld ADR |
| Nasdaq 100 Fund |
Barloworld and Nasdaq-100 Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Nasdaq-100 Fund
The main advantage of trading using opposite Barloworld and Nasdaq-100 Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Nasdaq-100 Fund 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 Nasdaq-100 Fund will offset losses from the drop in Nasdaq-100 Fund's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Nasdaq-100 Fund vs. Nasdaq 100 Profund Nasdaq 100 | Nasdaq-100 Fund vs. Select Fund R | Nasdaq-100 Fund vs. Select Fund C |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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