Correlation Between Barnes and Trustcash Holdings
Can any of the company-specific risk be diversified away by investing in both Barnes and Trustcash Holdings 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 Trustcash Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Trustcash Holdings, you can compare the effects of market volatilities on Barnes and Trustcash Holdings 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 Trustcash Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Trustcash Holdings.
Diversification Opportunities for Barnes and Trustcash Holdings
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barnes and Trustcash is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Trustcash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustcash 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 Trustcash Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustcash Holdings has no effect on the direction of Barnes i.e., Barnes and Trustcash Holdings go up and down completely randomly.
Pair Corralation between Barnes and Trustcash Holdings
Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.14 times more return on investment than Trustcash Holdings. However, Barnes Group is 7.09 times less risky than Trustcash Holdings. It trades about 0.17 of its potential returns per unit of risk. Trustcash Holdings is currently generating about -0.15 per unit of risk. If you would invest 4,041 in Barnes Group on August 30, 2024 and sell it today you would earn a total of 645.00 from holding Barnes Group or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Barnes Group vs. Trustcash Holdings
Performance |
| Timeline |
| Barnes Group |
| Trustcash Holdings |
Barnes and Trustcash Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Trustcash Holdings
The main advantage of trading using opposite Barnes and Trustcash Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Trustcash Holdings 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 Trustcash Holdings will offset losses from the drop in Trustcash Holdings' long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Trustcash Holdings vs. Remote Dynamics | Trustcash Holdings vs. Wellstar International | Trustcash Holdings vs. Encounter Technologi | Trustcash Holdings vs. Health Sciences Gr |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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