Correlation Between Barnes and Globus Maritime
Can any of the company-specific risk be diversified away by investing in both Barnes and Globus Maritime 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 Globus Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Globus Maritime, you can compare the effects of market volatilities on Barnes and Globus Maritime 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 Globus Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Globus Maritime.
Diversification Opportunities for Barnes and Globus Maritime
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barnes and Globus is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Globus Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Maritime 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 Globus Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Maritime has no effect on the direction of Barnes i.e., Barnes and Globus Maritime go up and down completely randomly.
Pair Corralation between Barnes and Globus Maritime
Taking into account the 90-day investment horizon Barnes is expected to generate 28.18 times less return on investment than Globus Maritime. But when comparing it to its historical volatility, Barnes Group is 41.95 times less risky than Globus Maritime. It trades about 0.36 of its potential returns per unit of risk. Globus Maritime is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 122.00 in Globus Maritime on November 2, 2024 and sell it today you would earn a total of 19.00 from holding Globus Maritime or generate 15.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
Barnes Group vs. Globus Maritime
Performance |
| Timeline |
| Barnes Group |
| Globus Maritime |
Barnes and Globus Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Globus Maritime
The main advantage of trading using opposite Barnes and Globus Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Globus Maritime 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 Globus Maritime will offset losses from the drop in Globus Maritime's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Globus Maritime vs. Seanergy Maritime Holdings | Globus Maritime vs. United Maritime | Globus Maritime vs. Performance Shipping | Globus Maritime vs. Castor Maritime |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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