Correlation Between Barnes and Kirby
Can any of the company-specific risk be diversified away by investing in both Barnes and Kirby 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 Kirby into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Kirby, you can compare the effects of market volatilities on Barnes and Kirby 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 Kirby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Kirby.
Diversification Opportunities for Barnes and Kirby
Pay attention - limited upside
The 3 months correlation between Barnes and Kirby is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Kirby in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirby 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 Kirby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirby has no effect on the direction of Barnes i.e., Barnes and Kirby go up and down completely randomly.
Pair Corralation between Barnes and Kirby
Taking into account the 90-day investment horizon Barnes is expected to generate 11.87 times less return on investment than Kirby. But when comparing it to its historical volatility, Barnes Group is 23.84 times less risky than Kirby. It trades about 0.34 of its potential returns per unit of risk. Kirby is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 10,580 in Kirby on November 1, 2024 and sell it today you would earn a total of 632.00 from holding Kirby or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Barnes Group vs. Kirby
Performance |
| Timeline |
| Barnes Group |
| Kirby |
Barnes and Kirby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Kirby
The main advantage of trading using opposite Barnes and Kirby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Kirby 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 Kirby will offset losses from the drop in Kirby'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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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