Correlation Between Mill City and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Mill City 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 Mill City and Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mill City Ventures and Barings BDC, you can compare the effects of market volatilities on Mill City 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 Mill City with a short position of Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and Barings BDC.
Diversification Opportunities for Mill City and Barings BDC
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mill and Barings is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC and Mill City 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 Mill City Ventures 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 Mill City i.e., Mill City and Barings BDC go up and down completely randomly.
Pair Corralation between Mill City and Barings BDC
Given the investment horizon of 90 days Mill City Ventures is expected to under-perform the Barings BDC. In addition to that, Mill City is 2.7 times more volatile than Barings BDC. It trades about -0.18 of its total potential returns per unit of risk. Barings BDC is currently generating about 0.12 per unit of volatility. If you would invest 990.00 in Barings BDC on August 28, 2024 and sell it today you would earn a total of 30.00 from holding Barings BDC or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mill City Ventures vs. Barings BDC
Performance |
| Timeline |
| Mill City Ventures |
| Barings BDC |
Mill City and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mill City and Barings BDC
The main advantage of trading using opposite Mill City and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mill City 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.| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
| Barings BDC vs. PowerUp Acquisition Corp | Barings BDC vs. Aurora Innovation | Barings BDC vs. HUMANA INC | Barings BDC vs. Aquagold International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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