Correlation Between Barnes and Cimpress
Can any of the company-specific risk be diversified away by investing in both Barnes and Cimpress 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 Cimpress into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Cimpress NV, you can compare the effects of market volatilities on Barnes and Cimpress 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 Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Cimpress.
Diversification Opportunities for Barnes and Cimpress
Excellent diversification
The 3 months correlation between Barnes and Cimpress is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV 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 Cimpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimpress NV has no effect on the direction of Barnes i.e., Barnes and Cimpress go up and down completely randomly.
Pair Corralation between Barnes and Cimpress
Taking into account the 90-day investment horizon Barnes is expected to generate 35.42 times less return on investment than Cimpress. But when comparing it to its historical volatility, Barnes Group is 33.25 times less risky than Cimpress. It trades about 0.12 of its potential returns per unit of risk. Cimpress NV is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 7,713 in Cimpress NV on August 28, 2024 and sell it today you would earn a total of 636.00 from holding Cimpress NV or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Group vs. Cimpress NV
Performance |
| Timeline |
| Barnes Group |
| Cimpress NV |
Barnes and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Cimpress
The main advantage of trading using opposite Barnes and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Cimpress 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 Cimpress will offset losses from the drop in Cimpress' long position.| Barnes vs. Aquagold International | Barnes vs. Morningstar Unconstrained Allocation | Barnes vs. High Yield Municipal Fund | Barnes vs. Thrivent High Yield |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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