Correlation Between Barnes and Ametek
Can any of the company-specific risk be diversified away by investing in both Barnes and Ametek 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 Barnes and Ametek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Ametek Inc, you can compare the effects of market volatilities on Barnes and Ametek 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 Barnes with a short position of Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Ametek.
Diversification Opportunities for Barnes and Ametek
Very weak diversification
The 3 months correlation between Barnes and Ametek is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc and Barnes 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 Barnes Group are associated (or correlated) with Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Barnes i.e., Barnes and Ametek go up and down completely randomly.
Pair Corralation between Barnes and Ametek
Taking into account the 90-day investment horizon Barnes is expected to generate 64.35 times less return on investment than Ametek. But when comparing it to its historical volatility, Barnes Group is 22.06 times less risky than Ametek. It trades about 0.12 of its potential returns per unit of risk. Ametek Inc is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 16,805 in Ametek Inc on August 28, 2024 and sell it today you would earn a total of 2,907 from holding Ametek Inc or generate 17.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Group vs. Ametek Inc
Performance |
| Timeline |
| Barnes Group |
| Ametek Inc |
Barnes and Ametek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Ametek
The main advantage of trading using opposite Barnes and Ametek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Ametek 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 Ametek will offset losses from the drop in Ametek's long position.| Barnes vs. Aquagold International | Barnes vs. Morningstar Unconstrained Allocation | Barnes vs. High Yield Municipal Fund | Barnes vs. Thrivent High Yield |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance |