Correlation Between Barloworld and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Barloworld and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio Aggregate, you can compare the effects of market volatilities on Barloworld and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and SPDR Portfolio.
Diversification Opportunities for Barloworld and SPDR Portfolio
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barloworld and SPDR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and SPDR Portfolio Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Aggregate 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Aggregate has no effect on the direction of Barloworld i.e., Barloworld and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Barloworld and SPDR Portfolio
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 27.81 times more return on investment than SPDR Portfolio. However, Barloworld is 27.81 times more volatile than SPDR Portfolio Aggregate. It trades about 0.21 of its potential returns per unit of risk. SPDR Portfolio Aggregate is currently generating about 0.15 per unit of risk. If you would invest 423.00 in Barloworld Ltd ADR on September 13, 2024 and sell it today you would earn a total of 155.00 from holding Barloworld Ltd ADR or generate 36.64% 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. SPDR Portfolio Aggregate
Performance |
| Timeline |
| Barloworld ADR |
| SPDR Portfolio Aggregate |
Barloworld and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and SPDR Portfolio
The main advantage of trading using opposite Barloworld and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| SPDR Portfolio vs. SPDR SP World | SPDR Portfolio vs. SPDR Barclays Intermediate | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio Emerging |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |