Correlation Between Consumer Portfolio and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Consumer Portfolio and Barings BDC 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 Consumer Portfolio and Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consumer Portfolio Services and Barings BDC, you can compare the effects of market volatilities on Consumer Portfolio and Barings BDC 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 Consumer Portfolio with a short position of Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consumer Portfolio and Barings BDC.
Diversification Opportunities for Consumer Portfolio and Barings BDC
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Consumer and Barings is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Portfolio Services and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC and Consumer Portfolio 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 Consumer Portfolio Services are associated (or correlated) with Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of Consumer Portfolio i.e., Consumer Portfolio and Barings BDC go up and down completely randomly.
Pair Corralation between Consumer Portfolio and Barings BDC
Given the investment horizon of 90 days Consumer Portfolio is expected to generate 1.71 times less return on investment than Barings BDC. In addition to that, Consumer Portfolio is 2.83 times more volatile than Barings BDC. It trades about 0.02 of its total potential returns per unit of risk. Barings BDC is currently generating about 0.07 per unit of volatility. If you would invest 692.00 in Barings BDC on November 19, 2024 and sell it today you would earn a total of 331.00 from holding Barings BDC or generate 47.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consumer Portfolio Services vs. Barings BDC
Performance |
| Timeline |
| Consumer Portfolio |
| Barings BDC |
Consumer Portfolio and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consumer Portfolio and Barings BDC
The main advantage of trading using opposite Consumer Portfolio and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consumer Portfolio position performs unexpectedly, Barings BDC 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 Barings BDC will offset losses from the drop in Barings BDC's long position.| Consumer Portfolio vs. Atlanticus Holdings Corp | Consumer Portfolio vs. Mill City Ventures | Consumer Portfolio vs. Nelnet Inc | Consumer Portfolio vs. Senmiao Technology |
| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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