Correlation Between Barnes and Crane NXT
Can any of the company-specific risk be diversified away by investing in both Barnes and Crane NXT 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 Crane NXT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Crane NXT Co, you can compare the effects of market volatilities on Barnes and Crane NXT 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 Crane NXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Crane NXT.
Diversification Opportunities for Barnes and Crane NXT
Very good diversification
The 3 months correlation between Barnes and Crane is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Crane NXT Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane NXT 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 Crane NXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane NXT has no effect on the direction of Barnes i.e., Barnes and Crane NXT go up and down completely randomly.
Pair Corralation between Barnes and Crane NXT
Taking into account the 90-day investment horizon Barnes is expected to generate 81.94 times less return on investment than Crane NXT. But when comparing it to its historical volatility, Barnes Group is 18.15 times less risky than Crane NXT. It trades about 0.07 of its potential returns per unit of risk. Crane NXT Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 5,574 in Crane NXT Co on August 30, 2024 and sell it today you would earn a total of 703.00 from holding Crane NXT Co or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Group vs. Crane NXT Co
Performance |
| Timeline |
| Barnes Group |
| Crane NXT |
Barnes and Crane NXT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Crane NXT
The main advantage of trading using opposite Barnes and Crane NXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Crane NXT 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 Crane NXT will offset losses from the drop in Crane NXT's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Crane NXT vs. Donaldson | Crane NXT vs. ITT Inc | Crane NXT vs. Franklin Electric Co | Crane NXT vs. Enerpac Tool Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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