Correlation Between Barnes and Weichai Power
Can any of the company-specific risk be diversified away by investing in both Barnes and Weichai Power 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 Weichai Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Weichai Power Co, you can compare the effects of market volatilities on Barnes and Weichai Power 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 Weichai Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Weichai Power.
Diversification Opportunities for Barnes and Weichai Power
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barnes and Weichai is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Weichai Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Power 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 Weichai Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Power has no effect on the direction of Barnes i.e., Barnes and Weichai Power go up and down completely randomly.
Pair Corralation between Barnes and Weichai Power
If you would invest 4,678 in Barnes Group on August 28, 2024 and sell it today you would earn a total of 12.00 from holding Barnes Group or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Barnes Group vs. Weichai Power Co
Performance |
| Timeline |
| Barnes Group |
| Weichai Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Barnes and Weichai Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Weichai Power
The main advantage of trading using opposite Barnes and Weichai Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Weichai Power 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 Weichai Power will offset losses from the drop in Weichai Power's long position.| Barnes vs. Aquagold International | Barnes vs. Morningstar Unconstrained Allocation | Barnes vs. High Yield Municipal Fund | Barnes vs. Thrivent High Yield |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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