Correlation Between Barclays Capital and Technology Select
Can any of the company-specific risk be diversified away by investing in both Barclays Capital and Technology Select 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 Barclays Capital and Technology Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and Technology Select Sector, you can compare the effects of market volatilities on Barclays Capital and Technology Select 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 Barclays Capital with a short position of Technology Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and Technology Select.
Diversification Opportunities for Barclays Capital and Technology Select
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barclays and Technology is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and Technology Select Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology Select Sector and Barclays Capital 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 Barclays Capital are associated (or correlated) with Technology Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology Select Sector has no effect on the direction of Barclays Capital i.e., Barclays Capital and Technology Select go up and down completely randomly.
Pair Corralation between Barclays Capital and Technology Select
Allowing for the 90-day total investment horizon Barclays Capital is expected to generate 41.56 times less return on investment than Technology Select. In addition to that, Barclays Capital is 1.51 times more volatile than Technology Select Sector. It trades about 0.0 of its total potential returns per unit of risk. Technology Select Sector is currently generating about 0.05 per unit of volatility. If you would invest 14,098 in Technology Select Sector on January 20, 2024 and sell it today you would earn a total of 5,155 from holding Technology Select Sector or generate 36.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 62.1% |
| Values | Daily Returns |
Barclays Capital vs. Technology Select Sector
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Technology Select Sector |
Barclays Capital and Technology Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and Technology Select
The main advantage of trading using opposite Barclays Capital and Technology Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, Technology Select 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 Technology Select will offset losses from the drop in Technology Select's long position.| Barclays Capital vs. Vanguard Total Stock | Barclays Capital vs. SPDR SP 500 | Barclays Capital vs. iShares Core SP | Barclays Capital vs. Vanguard Total Bond |
| Technology Select vs. ARK Genomic Revolution | Technology Select vs. ARK Innovation ETF | Technology Select vs. ARK Space Exploration |
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 CEOs Directory module to screen CEOs from public companies around the world.
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