Correlation Between Barnes and SCHMID Group
Can any of the company-specific risk be diversified away by investing in both Barnes and SCHMID Group 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 SCHMID Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and SCHMID Group NV, you can compare the effects of market volatilities on Barnes and SCHMID Group 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 SCHMID Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and SCHMID Group.
Diversification Opportunities for Barnes and SCHMID Group
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barnes and SCHMID is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and SCHMID Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHMID Group NV 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 SCHMID Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHMID Group NV has no effect on the direction of Barnes i.e., Barnes and SCHMID Group go up and down completely randomly.
Pair Corralation between Barnes and SCHMID Group
Taking into account the 90-day investment horizon Barnes is expected to generate 18.94 times less return on investment than SCHMID Group. But when comparing it to its historical volatility, Barnes Group is 7.55 times less risky than SCHMID Group. It trades about 0.03 of its potential returns per unit of risk. SCHMID Group NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 23.00 in SCHMID Group NV on August 30, 2024 and sell it today you would lose (2.88) from holding SCHMID Group NV or give up 12.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 27.88% |
| Values | Daily Returns |
Barnes Group vs. SCHMID Group NV
Performance |
| Timeline |
| Barnes Group |
| SCHMID Group NV |
Barnes and SCHMID Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and SCHMID Group
The main advantage of trading using opposite Barnes and SCHMID Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, SCHMID Group 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 SCHMID Group will offset losses from the drop in SCHMID Group's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| SCHMID Group vs. Montauk Renewables | SCHMID Group vs. One Liberty Properties | SCHMID Group vs. Cardinal Health | SCHMID Group vs. Comstock Holding Companies |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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