Correlation Between Barnes and Tennant
Can any of the company-specific risk be diversified away by investing in both Barnes and Tennant 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 Tennant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Tennant Company, you can compare the effects of market volatilities on Barnes and Tennant 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 Tennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Tennant.
Diversification Opportunities for Barnes and Tennant
Excellent diversification
The 3 months correlation between Barnes and Tennant is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Tennant Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tennant Company 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 Tennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tennant Company has no effect on the direction of Barnes i.e., Barnes and Tennant go up and down completely randomly.
Pair Corralation between Barnes and Tennant
Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.04 times more return on investment than Tennant. However, Barnes Group is 27.64 times less risky than Tennant. It trades about 0.07 of its potential returns per unit of risk. Tennant Company is currently generating about -0.01 per unit of risk. If you would invest 4,679 in Barnes Group on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Barnes Group or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Barnes Group vs. Tennant Company
Performance |
| Timeline |
| Barnes Group |
| Tennant Company |
Barnes and Tennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Tennant
The main advantage of trading using opposite Barnes and Tennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Tennant 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 Tennant will offset losses from the drop in Tennant's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Tennant vs. Franklin Electric Co | Tennant vs. Omega Flex | Tennant vs. Luxfer Holdings PLC | Tennant vs. Kadant Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |