Correlation Between Barnes and GreenPower
Can any of the company-specific risk be diversified away by investing in both Barnes and GreenPower 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 GreenPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and GreenPower Motor, you can compare the effects of market volatilities on Barnes and GreenPower 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 GreenPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and GreenPower.
Diversification Opportunities for Barnes and GreenPower
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barnes and GreenPower is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and GreenPower Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPower Motor 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 GreenPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenPower Motor has no effect on the direction of Barnes i.e., Barnes and GreenPower go up and down completely randomly.
Pair Corralation between Barnes and GreenPower
Taking into account the 90-day investment horizon Barnes is expected to generate 15.76 times less return on investment than GreenPower. But when comparing it to its historical volatility, Barnes Group is 105.67 times less risky than GreenPower. It trades about 0.34 of its potential returns per unit of risk. GreenPower Motor is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 77.00 in GreenPower Motor on November 1, 2024 and sell it today you would earn a total of 2.00 from holding GreenPower Motor or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Barnes Group vs. GreenPower Motor
Performance |
| Timeline |
| Barnes Group |
| GreenPower Motor |
Barnes and GreenPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and GreenPower
The main advantage of trading using opposite Barnes and GreenPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, GreenPower 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 GreenPower will offset losses from the drop in GreenPower's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| GreenPower vs. Phoenix Motor Common | GreenPower vs. Envirotech Vehicles | GreenPower vs. Volcon Inc | GreenPower vs. Zapp Electric Vehicles |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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