Correlation Between Barnes and RXO
Can any of the company-specific risk be diversified away by investing in both Barnes and RXO 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 RXO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and RXO Inc, you can compare the effects of market volatilities on Barnes and RXO 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 RXO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and RXO.
Diversification Opportunities for Barnes and RXO
Pay attention - limited upside
The 3 months correlation between Barnes and RXO is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and RXO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RXO Inc 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 RXO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RXO Inc has no effect on the direction of Barnes i.e., Barnes and RXO go up and down completely randomly.
Pair Corralation between Barnes and RXO
Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.89 times more return on investment than RXO. However, Barnes Group is 1.12 times less risky than RXO. It trades about 0.03 of its potential returns per unit of risk. RXO Inc is currently generating about 0.02 per unit of risk. If you would invest 4,112 in Barnes Group on November 9, 2024 and sell it today you would earn a total of 636.00 from holding Barnes Group or generate 15.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.38% |
| Values | Daily Returns |
Barnes Group vs. RXO Inc
Performance |
| Timeline |
| Barnes Group |
Risk-Adjusted Performance
Strong
Weak | Strong |
| RXO Inc |
Barnes and RXO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and RXO
The main advantage of trading using opposite Barnes and RXO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, RXO 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 RXO will offset losses from the drop in RXO'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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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