Correlation Between Barloworld and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both Barloworld and Commodities Strategy 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 Commodities Strategy 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 Commodities Strategy Fund, you can compare the effects of market volatilities on Barloworld and Commodities Strategy 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 Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Commodities Strategy.
Diversification Opportunities for Barloworld and Commodities Strategy
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barloworld and Commodities is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy 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 Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Barloworld i.e., Barloworld and Commodities Strategy go up and down completely randomly.
Pair Corralation between Barloworld and Commodities Strategy
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 3.72 times more return on investment than Commodities Strategy. However, Barloworld is 3.72 times more volatile than Commodities Strategy Fund. It trades about 0.02 of its potential returns per unit of risk. Commodities Strategy Fund is currently generating about 0.0 per unit of risk. If you would invest 410.00 in Barloworld Ltd ADR on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Barloworld Ltd ADR or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 67.29% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Commodities Strategy Fund
Performance |
| Timeline |
| Barloworld ADR |
| Commodities Strategy |
Barloworld and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Commodities Strategy
The main advantage of trading using opposite Barloworld and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets |