Correlation Between Barnes and Marten Transport
Can any of the company-specific risk be diversified away by investing in both Barnes and Marten Transport 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 Marten Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Marten Transport, you can compare the effects of market volatilities on Barnes and Marten Transport 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 Marten Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Marten Transport.
Diversification Opportunities for Barnes and Marten Transport
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barnes and Marten is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Marten Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marten Transport 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 Marten Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marten Transport has no effect on the direction of Barnes i.e., Barnes and Marten Transport go up and down completely randomly.
Pair Corralation between Barnes and Marten Transport
Taking into account the 90-day investment horizon Barnes is expected to generate 42.41 times less return on investment than Marten Transport. But when comparing it to its historical volatility, Barnes Group is 17.91 times less risky than Marten Transport. It trades about 0.05 of its potential returns per unit of risk. Marten Transport is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,571 in Marten Transport on August 24, 2024 and sell it today you would earn a total of 94.00 from holding Marten Transport or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Group vs. Marten Transport
Performance |
| Timeline |
| Barnes Group |
| Marten Transport |
Barnes and Marten Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Marten Transport
The main advantage of trading using opposite Barnes and Marten Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Marten Transport 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 Marten Transport will offset losses from the drop in Marten Transport's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Marten Transport vs. Werner Enterprises | Marten Transport vs. Covenant Logistics Group, | Marten Transport vs. Universal Logistics Holdings | Marten Transport vs. Schneider National |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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