Correlation Between Maiden Holdings and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings 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 Maiden Holdings and Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Barings BDC, you can compare the effects of market volatilities on Maiden Holdings 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 Maiden Holdings with a short position of Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Barings BDC.
Diversification Opportunities for Maiden Holdings and Barings BDC
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Maiden and Barings is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC and Maiden Holdings 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 Maiden Holdings 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 Maiden Holdings i.e., Maiden Holdings and Barings BDC go up and down completely randomly.
Pair Corralation between Maiden Holdings and Barings BDC
Given the investment horizon of 90 days Maiden Holdings is expected to generate 2.27 times less return on investment than Barings BDC. In addition to that, Maiden Holdings is 1.66 times more volatile than Barings BDC. It trades about 0.03 of its total potential returns per unit of risk. Barings BDC is currently generating about 0.1 per unit of volatility. If you would invest 677.00 in Barings BDC on August 31, 2024 and sell it today you would earn a total of 347.00 from holding Barings BDC or generate 51.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.06% |
| Values | Daily Returns |
Maiden Holdings vs. Barings BDC
Performance |
| Timeline |
| Maiden Holdings |
| Barings BDC |
Maiden Holdings and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Barings BDC
The main advantage of trading using opposite Maiden Holdings and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings 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.| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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