Correlation Between Barnes and SBC Medical

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Barnes and SBC Medical 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 SBC Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and SBC Medical Group, you can compare the effects of market volatilities on Barnes and SBC Medical 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 SBC Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and SBC Medical.

Diversification Opportunities for Barnes and SBC Medical

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Barnes and SBC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and SBC Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBC Medical Group 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 SBC Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBC Medical Group has no effect on the direction of Barnes i.e., Barnes and SBC Medical go up and down completely randomly.

Pair Corralation between Barnes and SBC Medical

Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.02 times more return on investment than SBC Medical. However, Barnes Group is 62.82 times less risky than SBC Medical. It trades about 0.29 of its potential returns per unit of risk. SBC Medical Group is currently generating about -0.14 per unit of risk. If you would invest  4,698  in Barnes Group on October 7, 2024 and sell it today you would earn a total of  20.00  from holding Barnes Group or generate 0.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Barnes Group  vs.  SBC Medical Group

 Performance 
       Timeline  
Barnes Group 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Barnes is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
SBC Medical Group 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SBC Medical Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, SBC Medical showed solid returns over the last few months and may actually be approaching a breakup point.

Barnes and SBC Medical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barnes and SBC Medical

The main advantage of trading using opposite Barnes and SBC Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, SBC Medical 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 SBC Medical will offset losses from the drop in SBC Medical's long position.
The idea behind Barnes Group and SBC Medical Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Bonds Directory
Find actively traded corporate debentures issued by US companies
Commodity Directory
Find actively traded commodities issued by global exchanges
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years