Correlation Between Helios Technologies and Barnes
Can any of the company-specific risk be diversified away by investing in both Helios Technologies and Barnes 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 Helios Technologies and Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helios Technologies and Barnes Group, you can compare the effects of market volatilities on Helios Technologies and Barnes 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 Helios Technologies with a short position of Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helios Technologies and Barnes.
Diversification Opportunities for Helios Technologies and Barnes
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Helios and Barnes is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Helios Technologies and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and Helios Technologies 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 Helios Technologies are associated (or correlated) with Barnes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barnes Group has no effect on the direction of Helios Technologies i.e., Helios Technologies and Barnes go up and down completely randomly.
Pair Corralation between Helios Technologies and Barnes
Given the investment horizon of 90 days Helios Technologies is expected to generate 27.36 times more return on investment than Barnes. However, Helios Technologies is 27.36 times more volatile than Barnes Group. It trades about 0.14 of its potential returns per unit of risk. Barnes Group is currently generating about 0.05 per unit of risk. If you would invest 4,714 in Helios Technologies on August 24, 2024 and sell it today you would earn a total of 517.00 from holding Helios Technologies or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helios Technologies vs. Barnes Group
Performance |
| Timeline |
| Helios Technologies |
| Barnes Group |
Helios Technologies and Barnes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helios Technologies and Barnes
The main advantage of trading using opposite Helios Technologies and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helios Technologies position performs unexpectedly, Barnes 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 Barnes will offset losses from the drop in Barnes' long position.| Helios Technologies vs. Illinois Tool Works | Helios Technologies vs. Pentair PLC | Helios Technologies vs. Emerson Electric | Helios Technologies vs. Smith AO |
| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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