Correlation Between Pro Blend and Barrow Hanley
Can any of the company-specific risk be diversified away by investing in both Pro Blend and Barrow Hanley 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 Pro Blend and Barrow Hanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Moderate Term and Barrow Hanley Floating, you can compare the effects of market volatilities on Pro Blend and Barrow Hanley 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 Pro Blend with a short position of Barrow Hanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Blend and Barrow Hanley.
Diversification Opportunities for Pro Blend and Barrow Hanley
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pro and Barrow is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Moderate Term and Barrow Hanley Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrow Hanley Floating and Pro Blend 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 Pro Blend Moderate Term are associated (or correlated) with Barrow Hanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrow Hanley Floating has no effect on the direction of Pro Blend i.e., Pro Blend and Barrow Hanley go up and down completely randomly.
Pair Corralation between Pro Blend and Barrow Hanley
Assuming the 90 days horizon Pro Blend Moderate Term is expected to generate 1.3 times more return on investment than Barrow Hanley. However, Pro Blend is 1.3 times more volatile than Barrow Hanley Floating. It trades about 0.11 of its potential returns per unit of risk. Barrow Hanley Floating is currently generating about 0.11 per unit of risk. If you would invest 1,364 in Pro Blend Moderate Term on September 12, 2024 and sell it today you would earn a total of 138.00 from holding Pro Blend Moderate Term or generate 10.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Pro Blend Moderate Term vs. Barrow Hanley Floating
Performance |
| Timeline |
| Pro Blend Moderate |
| Barrow Hanley Floating |
Pro Blend and Barrow Hanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro Blend and Barrow Hanley
The main advantage of trading using opposite Pro Blend and Barrow Hanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Blend position performs unexpectedly, Barrow Hanley 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 Barrow Hanley will offset losses from the drop in Barrow Hanley's long position.| Pro Blend vs. Pro Blend Servative Term | Pro Blend vs. Pro Blend Extended Term | Pro Blend vs. Pro Blend Maximum Term | Pro Blend vs. Greenspring Fund Retail |
| Barrow Hanley vs. Putnman Retirement Ready | Barrow Hanley vs. Pro Blend Moderate Term | Barrow Hanley vs. Wilmington Trust Retirement | Barrow Hanley vs. Sa Worldwide Moderate |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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