Correlation Between Barnes and HydroGraph Clean
Can any of the company-specific risk be diversified away by investing in both Barnes and HydroGraph Clean 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 HydroGraph Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and HydroGraph Clean Power, you can compare the effects of market volatilities on Barnes and HydroGraph Clean 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 HydroGraph Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and HydroGraph Clean.
Diversification Opportunities for Barnes and HydroGraph Clean
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barnes and HydroGraph is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and HydroGraph Clean Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HydroGraph Clean Power 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 HydroGraph Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HydroGraph Clean Power has no effect on the direction of Barnes i.e., Barnes and HydroGraph Clean go up and down completely randomly.
Pair Corralation between Barnes and HydroGraph Clean
Taking into account the 90-day investment horizon Barnes is expected to generate 2.58 times less return on investment than HydroGraph Clean. But when comparing it to its historical volatility, Barnes Group is 2.3 times less risky than HydroGraph Clean. It trades about 0.05 of its potential returns per unit of risk. HydroGraph Clean Power is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.77 in HydroGraph Clean Power on September 3, 2024 and sell it today you would earn a total of 3.23 from holding HydroGraph Clean Power or generate 47.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.97% |
| Values | Daily Returns |
Barnes Group vs. HydroGraph Clean Power
Performance |
| Timeline |
| Barnes Group |
| HydroGraph Clean Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Barnes and HydroGraph Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and HydroGraph Clean
The main advantage of trading using opposite Barnes and HydroGraph Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, HydroGraph Clean 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 HydroGraph Clean will offset losses from the drop in HydroGraph Clean's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| HydroGraph Clean vs. G6 Materials Corp | HydroGraph Clean vs. Nano One Materials | HydroGraph Clean vs. Haydale Graphene Industries | HydroGraph Clean vs. Orica Ltd ADR |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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