Correlation Between Barnes and Industrials Portfolio
Can any of the company-specific risk be diversified away by investing in both Barnes and Industrials Portfolio 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 Industrials Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Industrials Portfolio Industrials, you can compare the effects of market volatilities on Barnes and Industrials Portfolio 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 Industrials Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Industrials Portfolio.
Diversification Opportunities for Barnes and Industrials Portfolio
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barnes and Industrials is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Industrials Portfolio Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrials Portfolio 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 Industrials Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrials Portfolio has no effect on the direction of Barnes i.e., Barnes and Industrials Portfolio go up and down completely randomly.
Pair Corralation between Barnes and Industrials Portfolio
Taking into account the 90-day investment horizon Barnes is expected to generate 5.82 times less return on investment than Industrials Portfolio. But when comparing it to its historical volatility, Barnes Group is 22.45 times less risky than Industrials Portfolio. It trades about 0.59 of its potential returns per unit of risk. Industrials Portfolio Industrials is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,138 in Industrials Portfolio Industrials on November 5, 2024 and sell it today you would earn a total of 155.00 from holding Industrials Portfolio Industrials or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.68% |
| Values | Daily Returns |
Barnes Group vs. Industrials Portfolio Industri
Performance |
| Timeline |
| Barnes Group |
| Industrials Portfolio |
Barnes and Industrials Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Industrials Portfolio
The main advantage of trading using opposite Barnes and Industrials Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Industrials Portfolio 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 Industrials Portfolio will offset losses from the drop in Industrials Portfolio's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |