Correlation Between Barloworld and Aquagold International

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Can any of the company-specific risk be diversified away by investing in both Barloworld and Aquagold International 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 Aquagold International 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 Aquagold International, you can compare the effects of market volatilities on Barloworld and Aquagold International 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 Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Aquagold International.

Diversification Opportunities for Barloworld and Aquagold International

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Barloworld and Aquagold International

If you would invest  465.00  in Barloworld Ltd ADR on March 27, 2024 and sell it today you would earn a total of  10.00  from holding Barloworld Ltd ADR or generate 2.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy90.0%
ValuesDaily Returns

Barloworld Ltd ADR  vs.  Aquagold International

 Performance 
       Timeline  
Barloworld ADR 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Barloworld Ltd ADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Barloworld showed solid returns over the last few months and may actually be approaching a breakup point.
Aquagold International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Barloworld and Aquagold International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barloworld and Aquagold International

The main advantage of trading using opposite Barloworld and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld position performs unexpectedly, Aquagold International 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 Aquagold International will offset losses from the drop in Aquagold International's long position.
The idea behind Barloworld Ltd ADR and Aquagold International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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