Correlation Between Barnes and Samfine Creation
Can any of the company-specific risk be diversified away by investing in both Barnes and Samfine Creation 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 Samfine Creation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Samfine Creation Holdings, you can compare the effects of market volatilities on Barnes and Samfine Creation 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 Samfine Creation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Samfine Creation.
Diversification Opportunities for Barnes and Samfine Creation
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barnes and Samfine is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Samfine Creation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samfine Creation Holdings 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 Samfine Creation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samfine Creation Holdings has no effect on the direction of Barnes i.e., Barnes and Samfine Creation go up and down completely randomly.
Pair Corralation between Barnes and Samfine Creation
Taking into account the 90-day investment horizon Barnes is expected to generate 3.89 times less return on investment than Samfine Creation. But when comparing it to its historical volatility, Barnes Group is 9.1 times less risky than Samfine Creation. It trades about 0.07 of its potential returns per unit of risk. Samfine Creation Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 530.00 in Samfine Creation Holdings on November 8, 2024 and sell it today you would lose (418.00) from holding Samfine Creation Holdings or give up 78.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.22% |
| Values | Daily Returns |
Barnes Group vs. Samfine Creation Holdings
Performance |
| Timeline |
| Barnes Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
| Samfine Creation Holdings |
Barnes and Samfine Creation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Samfine Creation
The main advantage of trading using opposite Barnes and Samfine Creation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Samfine Creation 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 Samfine Creation will offset losses from the drop in Samfine Creation's long position.The idea behind Barnes Group and Samfine Creation Holdings 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.| Samfine Creation vs. Goosehead Insurance | Samfine Creation vs. Pekin Life Insurance | Samfine Creation vs. CECO Environmental Corp | Samfine Creation vs. Radian Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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