Correlation Between Barloworld and Global X
Can any of the company-specific risk be diversified away by investing in both Barloworld and Global X 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 Barloworld and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and Global X Blockchain, you can compare the effects of market volatilities on Barloworld and Global X 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 Barloworld with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Global X.
Diversification Opportunities for Barloworld and Global X
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barloworld and Global is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Global X Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Blockchain and Barloworld 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 Barloworld Ltd ADR are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Blockchain has no effect on the direction of Barloworld i.e., Barloworld and Global X go up and down completely randomly.
Pair Corralation between Barloworld and Global X
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 0.78 times more return on investment than Global X. However, Barloworld Ltd ADR is 1.28 times less risky than Global X. It trades about 0.05 of its potential returns per unit of risk. Global X Blockchain is currently generating about -0.01 per unit of risk. If you would invest 400.00 in Barloworld Ltd ADR on February 18, 2024 and sell it today you would earn a total of 34.00 from holding Barloworld Ltd ADR or generate 8.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Barloworld Ltd ADR vs. Global X Blockchain
Performance |
Timeline |
Barloworld ADR |
Global X Blockchain |
Barloworld and Global X Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barloworld and Global X
The main advantage of trading using opposite Barloworld and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.Barloworld vs. United Rentals | Barloworld vs. AerCap Holdings NV | Barloworld vs. U Haul Holding | Barloworld vs. U Haul Holding |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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