Correlation Between W P and Barclays Capital

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

Diversification Opportunities for W P and Barclays Capital

0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between WPC and Barclays is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding W P Carey and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and W P 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 W P Carey 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 W P i.e., W P and Barclays Capital go up and down completely randomly.

Pair Corralation between W P and Barclays Capital

Considering the 90-day investment horizon W P Carey is expected to under-perform the Barclays Capital. In addition to that, W P is 1.59 times more volatile than Barclays Capital. It trades about -0.02 of its total potential returns per unit of risk. Barclays Capital is currently generating about -0.02 per unit of volatility. If you would invest  4,446  in Barclays Capital on December 29, 2023 and sell it today you would lose (159.00) from holding Barclays Capital or give up 3.58% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy53.76%
ValuesDaily Returns

W P Carey  vs.  Barclays Capital

 Performance 
       Timeline  
W P Carey 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days W P Carey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
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. In spite of very healthy fundamental indicators, Barclays Capital is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

W P and Barclays Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with W P and Barclays Capital

The main advantage of trading using opposite W P and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W P 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 W P Carey 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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