Correlation Between Barclays Capital and CHIR
Can any of the company-specific risk be diversified away by investing in both Barclays Capital and CHIR 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 Barclays Capital and CHIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and CHIR, you can compare the effects of market volatilities on Barclays Capital and CHIR 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 Barclays Capital with a short position of CHIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and CHIR.
Diversification Opportunities for Barclays Capital and CHIR
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barclays and CHIR is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and CHIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIR and Barclays Capital 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 Barclays Capital are associated (or correlated) with CHIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIR has no effect on the direction of Barclays Capital i.e., Barclays Capital and CHIR go up and down completely randomly.
Pair Corralation between Barclays Capital and CHIR
If you would invest 1,711 in CHIR on October 21, 2024 and sell it today you would earn a total of 0.00 from holding CHIR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays Capital vs. CHIR
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CHIR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Barclays Capital and CHIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and CHIR
The main advantage of trading using opposite Barclays Capital and CHIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, CHIR 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 CHIR will offset losses from the drop in CHIR's long position.The idea behind Barclays Capital and CHIR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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