Correlation Between Barnes and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Barnes and Fidelity Advisor 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 Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Fidelity Advisor Industrials, you can compare the effects of market volatilities on Barnes and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Fidelity Advisor.
Diversification Opportunities for Barnes and Fidelity Advisor
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barnes and Fidelity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Fidelity Advisor Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Ind 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Ind has no effect on the direction of Barnes i.e., Barnes and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Barnes and Fidelity Advisor
Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.13 times more return on investment than Fidelity Advisor. However, Barnes Group is 7.44 times less risky than Fidelity Advisor. It trades about 0.35 of its potential returns per unit of risk. Fidelity Advisor Industrials is currently generating about -0.08 per unit of risk. If you would invest 4,665 in Barnes Group on September 13, 2024 and sell it today you would earn a total of 39.00 from holding Barnes Group or generate 0.84% 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. Fidelity Advisor Industrials
Performance |
| Timeline |
| Barnes Group |
| Fidelity Advisor Ind |
Barnes and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Fidelity Advisor
The main advantage of trading using opposite Barnes and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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