Correlation Between Barnes and ATS
Can any of the company-specific risk be diversified away by investing in both Barnes and ATS 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 ATS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and ATS Corporation, you can compare the effects of market volatilities on Barnes and ATS 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 ATS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and ATS.
Diversification Opportunities for Barnes and ATS
Poor diversification
The 3 months correlation between Barnes and ATS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and ATS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATS Corporation 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 ATS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATS Corporation has no effect on the direction of Barnes i.e., Barnes and ATS go up and down completely randomly.
Pair Corralation between Barnes and ATS
Taking into account the 90-day investment horizon Barnes Group is expected to generate 1.17 times more return on investment than ATS. However, Barnes is 1.17 times more volatile than ATS Corporation. It trades about 0.03 of its potential returns per unit of risk. ATS Corporation is currently generating about 0.0 per unit of risk. If you would invest 3,893 in Barnes Group on August 27, 2024 and sell it today you would earn a total of 789.00 from holding Barnes Group or generate 20.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Group vs. ATS Corp.
Performance |
| Timeline |
| Barnes Group |
| ATS Corporation |
Barnes and ATS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and ATS
The main advantage of trading using opposite Barnes and ATS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, ATS 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 ATS will offset losses from the drop in ATS's long position.| Barnes vs. Aquagold International | Barnes vs. Morningstar Unconstrained Allocation | Barnes vs. High Yield Municipal Fund | Barnes vs. Thrivent High Yield |
| ATS vs. Aquagold International | ATS vs. Morningstar Unconstrained Allocation | ATS vs. High Yield Municipal Fund | ATS 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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