Correlation Between Barnes and Mammoth Energy
Can any of the company-specific risk be diversified away by investing in both Barnes and Mammoth Energy 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 Mammoth Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Mammoth Energy Services, you can compare the effects of market volatilities on Barnes and Mammoth Energy 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 Mammoth Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Mammoth Energy.
Diversification Opportunities for Barnes and Mammoth Energy
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barnes and Mammoth is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Mammoth Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Energy Services 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 Mammoth Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Energy Services has no effect on the direction of Barnes i.e., Barnes and Mammoth Energy go up and down completely randomly.
Pair Corralation between Barnes and Mammoth Energy
Taking into account the 90-day investment horizon Barnes is expected to generate 48.04 times less return on investment than Mammoth Energy. But when comparing it to its historical volatility, Barnes Group is 58.66 times less risky than Mammoth Energy. It trades about 0.29 of its potential returns per unit of risk. Mammoth Energy Services is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 282.00 in Mammoth Energy Services on October 20, 2024 and sell it today you would earn a total of 52.00 from holding Mammoth Energy Services or generate 18.44% 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. Mammoth Energy Services
Performance |
| Timeline |
| Barnes Group |
| Mammoth Energy Services |
Barnes and Mammoth Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Mammoth Energy
The main advantage of trading using opposite Barnes and Mammoth Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Mammoth Energy 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 Mammoth Energy will offset losses from the drop in Mammoth Energy's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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