Correlation Between Barnes and Twin Disc
Can any of the company-specific risk be diversified away by investing in both Barnes and Twin Disc 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 Twin Disc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Twin Disc Incorporated, you can compare the effects of market volatilities on Barnes and Twin Disc 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 Twin Disc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Twin Disc.
Diversification Opportunities for Barnes and Twin Disc
Excellent diversification
The 3 months correlation between Barnes and Twin is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Twin Disc Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twin Disc 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 Twin Disc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twin Disc has no effect on the direction of Barnes i.e., Barnes and Twin Disc go up and down completely randomly.
Pair Corralation between Barnes and Twin Disc
Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.92 times more return on investment than Twin Disc. However, Barnes Group is 1.09 times less risky than Twin Disc. It trades about 0.18 of its potential returns per unit of risk. Twin Disc Incorporated is currently generating about -0.07 per unit of risk. If you would invest 3,976 in Barnes Group on August 25, 2024 and sell it today you would earn a total of 706.00 from holding Barnes Group or generate 17.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Group vs. Twin Disc Incorporated
Performance |
| Timeline |
| Barnes Group |
| Twin Disc |
Barnes and Twin Disc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Twin Disc
The main advantage of trading using opposite Barnes and Twin Disc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Twin Disc 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 Twin Disc will offset losses from the drop in Twin Disc's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| Twin Disc vs. Standex International | Twin Disc vs. Intevac | Twin Disc vs. Thermon Group Holdings | Twin Disc vs. Enpro Industries |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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