Correlation Between Via Renewables and Barclays PLC

Can any of the company-specific risk be diversified away by investing in both Via Renewables and Barclays PLC 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 Via Renewables and Barclays PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Via Renewables and Barclays PLC ADR, you can compare the effects of market volatilities on Via Renewables and Barclays PLC 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 Via Renewables with a short position of Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and Barclays PLC.

Diversification Opportunities for Via Renewables and Barclays PLC

0.72

Correlation Coefficient

Via Renewables  Barclays PLC

Poor diversification

The 3 months correlation between Via and Barclays is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Barclays PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC ADR and Via Renewables 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 Via Renewables are associated (or correlated) with Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC ADR has no effect on the direction of Via Renewables i.e., Via Renewables and Barclays PLC go up and down completely randomly.

Pair Corralation between Via Renewables and Barclays PLC

Assuming the 90 days horizon Via Renewables is expected to under-perform the Barclays PLC. But the preferred stock apears to be less risky and, when comparing its historical volatility, Via Renewables is 1.1 times less risky than Barclays PLC. The preferred stock trades about -0.09 of its potential returns per unit of risk. The Barclays PLC ADR is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  987.00  in Barclays PLC ADR on February 6, 2024 and sell it today you would earn a total of  39.00  from holding Barclays PLC ADR or generate 3.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Via Renewables  vs.  Barclays PLC ADR

Via Renewables

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Via Renewables may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Barclays PLC ADR

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barclays PLC ADR are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Barclays PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Via Renewables and Barclays PLC

The main advantage of trading using opposite Via Renewables and Barclays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables position performs unexpectedly, Barclays PLC 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 PLC will offset losses from the drop in Barclays PLC's long position.

The idea behind Via Renewables and Barclays PLC ADR 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.