Correlation Between Barloworld and Swiss Re
Can any of the company-specific risk be diversified away by investing in both Barloworld and Swiss Re 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 Swiss Re 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 Swiss Re, you can compare the effects of market volatilities on Barloworld and Swiss Re 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 Swiss Re. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Swiss Re.
Diversification Opportunities for Barloworld and Swiss Re
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barloworld and Swiss is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Swiss Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Re 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 Swiss Re. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Re has no effect on the direction of Barloworld i.e., Barloworld and Swiss Re go up and down completely randomly.
Pair Corralation between Barloworld and Swiss Re
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 4.98 times more return on investment than Swiss Re. However, Barloworld is 4.98 times more volatile than Swiss Re. It trades about 0.04 of its potential returns per unit of risk. Swiss Re is currently generating about 0.1 per unit of risk. If you would invest 347.00 in Barloworld Ltd ADR on September 12, 2024 and sell it today you would earn a total of 76.00 from holding Barloworld Ltd ADR or generate 21.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.46% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Swiss Re
Performance |
| Timeline |
| Barloworld ADR |
| Swiss Re |
Barloworld and Swiss Re Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Swiss Re
The main advantage of trading using opposite Barloworld and Swiss Re positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Swiss Re 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 Swiss Re will offset losses from the drop in Swiss Re's long position.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Swiss Re vs. Freedom Bank of | Swiss Re vs. HUMANA INC | Swiss Re vs. Barloworld Ltd ADR | Swiss Re vs. Morningstar Unconstrained Allocation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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