Correlation Between Next Hydrogen and Barnes
Can any of the company-specific risk be diversified away by investing in both Next Hydrogen 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 Next Hydrogen and Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Hydrogen Solutions and Barnes Group, you can compare the effects of market volatilities on Next Hydrogen 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 Next Hydrogen with a short position of Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Hydrogen and Barnes.
Diversification Opportunities for Next Hydrogen and Barnes
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Next and Barnes is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Next Hydrogen Solutions and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and Next Hydrogen 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 Next Hydrogen Solutions 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 Next Hydrogen i.e., Next Hydrogen and Barnes go up and down completely randomly.
Pair Corralation between Next Hydrogen and Barnes
Assuming the 90 days horizon Next Hydrogen Solutions is expected to under-perform the Barnes. In addition to that, Next Hydrogen is 95.51 times more volatile than Barnes Group. It trades about -0.11 of its total potential returns per unit of risk. Barnes Group is currently generating about 0.09 per unit of volatility. If you would invest 4,675 in Barnes Group on September 2, 2024 and sell it today you would earn a total of 9.00 from holding Barnes Group or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Hydrogen Solutions vs. Barnes Group
Performance |
| Timeline |
| Next Hydrogen Solutions |
| Barnes Group |
Next Hydrogen and Barnes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Hydrogen and Barnes
The main advantage of trading using opposite Next Hydrogen and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Hydrogen 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.| Next Hydrogen vs. Weir Group PLC | Next Hydrogen vs. Greenshift Corp | Next Hydrogen vs. Quality Industrial Corp | Next Hydrogen vs. ITM Power Plc |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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