Correlation Between Barnes and Resources Connection
Can any of the company-specific risk be diversified away by investing in both Barnes and Resources Connection 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 Resources Connection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Resources Connection, you can compare the effects of market volatilities on Barnes and Resources Connection 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 Resources Connection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Resources Connection.
Diversification Opportunities for Barnes and Resources Connection
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barnes and Resources is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Resources Connection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resources Connection 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 Resources Connection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resources Connection has no effect on the direction of Barnes i.e., Barnes and Resources Connection go up and down completely randomly.
Pair Corralation between Barnes and Resources Connection
Taking into account the 90-day investment horizon Barnes Group is expected to generate 1.15 times more return on investment than Resources Connection. However, Barnes is 1.15 times more volatile than Resources Connection. It trades about 0.03 of its potential returns per unit of risk. Resources Connection is currently generating about -0.06 per unit of risk. If you would invest 3,963 in Barnes Group on September 2, 2024 and sell it today you would earn a total of 721.00 from holding Barnes Group or generate 18.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Group vs. Resources Connection
Performance |
| Timeline |
| Barnes Group |
| Resources Connection |
Barnes and Resources Connection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Resources Connection
The main advantage of trading using opposite Barnes and Resources Connection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Resources Connection 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 Resources Connection will offset losses from the drop in Resources Connection's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Resources Connection vs. CRA International | Resources Connection vs. Huron Consulting Group | Resources Connection vs. Forrester Research | Resources Connection vs. Exponent |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |