Correlation Between ACNB and Barnwell Industries
Can any of the company-specific risk be diversified away by investing in both ACNB and Barnwell Industries 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 ACNB and Barnwell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACNB Corporation and Barnwell Industries, you can compare the effects of market volatilities on ACNB and Barnwell Industries 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 ACNB with a short position of Barnwell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACNB and Barnwell Industries.
Diversification Opportunities for ACNB and Barnwell Industries
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ACNB and Barnwell is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and Barnwell Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnwell Industries and ACNB 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 ACNB Corporation are associated (or correlated) with Barnwell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barnwell Industries has no effect on the direction of ACNB i.e., ACNB and Barnwell Industries go up and down completely randomly.
Pair Corralation between ACNB and Barnwell Industries
Given the investment horizon of 90 days ACNB Corporation is expected to generate 0.97 times more return on investment than Barnwell Industries. However, ACNB Corporation is 1.03 times less risky than Barnwell Industries. It trades about 0.04 of its potential returns per unit of risk. Barnwell Industries is currently generating about -0.03 per unit of risk. If you would invest 3,522 in ACNB Corporation on August 24, 2024 and sell it today you would earn a total of 1,240 from holding ACNB Corporation or generate 35.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACNB Corp. vs. Barnwell Industries
Performance |
| Timeline |
| ACNB |
| Barnwell Industries |
ACNB and Barnwell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACNB and Barnwell Industries
The main advantage of trading using opposite ACNB and Barnwell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB position performs unexpectedly, Barnwell Industries 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 Barnwell Industries will offset losses from the drop in Barnwell Industries' long position.The idea behind ACNB Corporation and Barnwell Industries 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.| Barnwell Industries vs. Houston American Energy | Barnwell Industries vs. Mexco Energy | Barnwell Industries vs. PHX Minerals | Barnwell Industries vs. Ring Energy |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |