Correlation Between Barnes and Steel Connect
Can any of the company-specific risk be diversified away by investing in both Barnes and Steel Connect 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 Steel Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Steel Connect, you can compare the effects of market volatilities on Barnes and Steel Connect 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 Steel Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Steel Connect.
Diversification Opportunities for Barnes and Steel Connect
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barnes and Steel is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect 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 Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of Barnes i.e., Barnes and Steel Connect go up and down completely randomly.
Pair Corralation between Barnes and Steel Connect
Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.73 times more return on investment than Steel Connect. However, Barnes Group is 1.36 times less risky than Steel Connect. It trades about 0.02 of its potential returns per unit of risk. Steel Connect is currently generating about 0.0 per unit of risk. If you would invest 4,438 in Barnes Group on August 27, 2024 and sell it today you would earn a total of 252.00 from holding Barnes Group or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Group vs. Steel Connect
Performance |
| Timeline |
| Barnes Group |
| Steel Connect |
Barnes and Steel Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Steel Connect
The main advantage of trading using opposite Barnes and Steel Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Steel Connect 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 Steel Connect will offset losses from the drop in Steel Connect's long position.| Barnes vs. Aquagold International | Barnes vs. Morningstar Unconstrained Allocation | Barnes vs. High Yield Municipal Fund | Barnes vs. Thrivent High Yield |
| Steel Connect vs. Baosheng Media Group | Steel Connect vs. Impact Fusion International | Steel Connect vs. Mirriad Advertising plc | Steel Connect vs. CyberAgent ADR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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