Correlation Between Sea and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Sea 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 Sea and Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Barings BDC, you can compare the effects of market volatilities on Sea 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 Sea with a short position of Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Barings BDC.
Diversification Opportunities for Sea and Barings BDC
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sea and Barings is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC and Sea 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 Sea 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 Sea i.e., Sea and Barings BDC go up and down completely randomly.
Pair Corralation between Sea and Barings BDC
Allowing for the 90-day total investment horizon Sea is expected to generate 2.62 times more return on investment than Barings BDC. However, Sea is 2.62 times more volatile than Barings BDC. It trades about 0.21 of its potential returns per unit of risk. Barings BDC is currently generating about 0.12 per unit of risk. If you would invest 9,926 in Sea on August 28, 2024 and sell it today you would earn a total of 1,467 from holding Sea or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea vs. Barings BDC
Performance |
| Timeline |
| Sea |
| Barings BDC |
Sea and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and Barings BDC
The main advantage of trading using opposite Sea and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea 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.| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
| Barings BDC vs. Aurora Innovation | Barings BDC vs. HUMANA INC | Barings BDC vs. Aquagold International | Barings BDC vs. Barloworld Ltd ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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