Correlation Between Barnes and Terex
Can any of the company-specific risk be diversified away by investing in both Barnes and Terex 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 Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Terex, you can compare the effects of market volatilities on Barnes and Terex 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 Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Terex.
Diversification Opportunities for Barnes and Terex
Excellent diversification
The 3 months correlation between Barnes and Terex is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex 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 Terex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terex has no effect on the direction of Barnes i.e., Barnes and Terex go up and down completely randomly.
Pair Corralation between Barnes and Terex
Taking into account the 90-day investment horizon Barnes is expected to generate 17.84 times less return on investment than Terex. But when comparing it to its historical volatility, Barnes Group is 22.86 times less risky than Terex. It trades about 0.36 of its potential returns per unit of risk. Terex is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,452 in Terex on November 2, 2024 and sell it today you would earn a total of 445.00 from holding Terex or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
Barnes Group vs. Terex
Performance |
| Timeline |
| Barnes Group |
| Terex |
Barnes and Terex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Terex
The main advantage of trading using opposite Barnes and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Terex 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 Terex will offset losses from the drop in Terex's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Terex vs. Oshkosh | Terex vs. Astec Industries | Terex vs. Hyster Yale Materials Handling | Terex vs. Manitowoc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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