Correlation Between TPG and Barings BDC
Can any of the company-specific risk be diversified away by investing in both TPG 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 TPG and Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Inc and Barings BDC, you can compare the effects of market volatilities on TPG 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 TPG with a short position of Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG and Barings BDC.
Diversification Opportunities for TPG and Barings BDC
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TPG and Barings is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding TPG Inc and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC and TPG 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 TPG Inc 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 TPG i.e., TPG and Barings BDC go up and down completely randomly.
Pair Corralation between TPG and Barings BDC
Considering the 90-day investment horizon TPG Inc is expected to generate 1.81 times more return on investment than Barings BDC. However, TPG is 1.81 times more volatile than Barings BDC. It trades about 0.09 of its potential returns per unit of risk. Barings BDC is currently generating about 0.07 per unit of risk. If you would invest 3,020 in TPG Inc on November 5, 2024 and sell it today you would earn a total of 3,705 from holding TPG Inc or generate 122.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPG Inc vs. Barings BDC
Performance |
| Timeline |
| TPG Inc |
| Barings BDC |
TPG and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG and Barings BDC
The main advantage of trading using opposite TPG and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG 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.| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |