Correlation Between Barnes and MSA Safety
Can any of the company-specific risk be diversified away by investing in both Barnes and MSA Safety 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 MSA Safety into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and MSA Safety, you can compare the effects of market volatilities on Barnes and MSA Safety 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 MSA Safety. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and MSA Safety.
Diversification Opportunities for Barnes and MSA Safety
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barnes and MSA is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and MSA Safety in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSA Safety 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 MSA Safety. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSA Safety has no effect on the direction of Barnes i.e., Barnes and MSA Safety go up and down completely randomly.
Pair Corralation between Barnes and MSA Safety
Taking into account the 90-day investment horizon Barnes is expected to generate 1.03 times less return on investment than MSA Safety. In addition to that, Barnes is 1.67 times more volatile than MSA Safety. It trades about 0.03 of its total potential returns per unit of risk. MSA Safety is currently generating about 0.05 per unit of volatility. If you would invest 13,124 in MSA Safety on August 28, 2024 and sell it today you would earn a total of 4,497 from holding MSA Safety or generate 34.27% 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. MSA Safety
Performance |
| Timeline |
| Barnes Group |
| MSA Safety |
Barnes and MSA Safety Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and MSA Safety
The main advantage of trading using opposite Barnes and MSA Safety positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, MSA Safety 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 MSA Safety will offset losses from the drop in MSA Safety's long position.| Barnes vs. Aquagold International | Barnes vs. Morningstar Unconstrained Allocation | Barnes vs. High Yield Municipal Fund | Barnes vs. Thrivent High Yield |
| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |