Correlation Between Rockwell Automation and Barnes
Can any of the company-specific risk be diversified away by investing in both Rockwell Automation 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 Rockwell Automation and Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockwell Automation and Barnes Group, you can compare the effects of market volatilities on Rockwell Automation 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 Rockwell Automation with a short position of Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockwell Automation and Barnes.
Diversification Opportunities for Rockwell Automation and Barnes
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rockwell and Barnes is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Rockwell Automation and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and Rockwell Automation 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 Rockwell Automation 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 Rockwell Automation i.e., Rockwell Automation and Barnes go up and down completely randomly.
Pair Corralation between Rockwell Automation and Barnes
Considering the 90-day investment horizon Rockwell Automation is expected to generate 28.08 times more return on investment than Barnes. However, Rockwell Automation is 28.08 times more volatile than Barnes Group. It trades about 0.17 of its potential returns per unit of risk. Barnes Group is currently generating about 0.07 per unit of risk. If you would invest 26,720 in Rockwell Automation on August 30, 2024 and sell it today you would earn a total of 2,775 from holding Rockwell Automation or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rockwell Automation vs. Barnes Group
Performance |
| Timeline |
| Rockwell Automation |
| Barnes Group |
Rockwell Automation and Barnes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockwell Automation and Barnes
The main advantage of trading using opposite Rockwell Automation and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockwell Automation 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.| Rockwell Automation vs. Dover | Rockwell Automation vs. Illinois Tool Works | Rockwell Automation vs. Ingersoll Rand | Rockwell Automation vs. Eaton 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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