Correlation Between Baxter International and Barclays Capital

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Can any of the company-specific risk be diversified away by investing in both Baxter International and Barclays Capital 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 Baxter International and Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baxter International and Barclays Capital, you can compare the effects of market volatilities on Baxter International and Barclays Capital 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 Baxter International with a short position of Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baxter International and Barclays Capital.

Diversification Opportunities for Baxter International and Barclays Capital

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Baxter and Barclays is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baxter International and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and Baxter International 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 Baxter International are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Baxter International i.e., Baxter International and Barclays Capital go up and down completely randomly.

Pair Corralation between Baxter International and Barclays Capital

If you would invest  3,883  in Baxter International on December 29, 2023 and sell it today you would earn a total of  386.00  from holding Baxter International or generate 9.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Baxter International  vs.  Barclays Capital

 Performance 
       Timeline  
Baxter International 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Baxter International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Baxter International may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Barclays Capital 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Barclays Capital is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Baxter International and Barclays Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Baxter International and Barclays Capital

The main advantage of trading using opposite Baxter International and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baxter International position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.
The idea behind Baxter International and Barclays Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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