Correlation Between Scottie Resources and Barnes
Can any of the company-specific risk be diversified away by investing in both Scottie Resources 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 Scottie Resources and Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottie Resources Corp and Barnes Group, you can compare the effects of market volatilities on Scottie Resources 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 Scottie Resources with a short position of Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottie Resources and Barnes.
Diversification Opportunities for Scottie Resources and Barnes
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scottie and Barnes is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Scottie Resources Corp and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and Scottie Resources 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 Scottie Resources Corp 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 Scottie Resources i.e., Scottie Resources and Barnes go up and down completely randomly.
Pair Corralation between Scottie Resources and Barnes
Assuming the 90 days horizon Scottie Resources is expected to generate 1.95 times less return on investment than Barnes. In addition to that, Scottie Resources is 2.93 times more volatile than Barnes Group. It trades about 0.02 of its total potential returns per unit of risk. Barnes Group is currently generating about 0.11 per unit of volatility. If you would invest 2,799 in Barnes Group on September 2, 2024 and sell it today you would earn a total of 1,885 from holding Barnes Group or generate 67.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottie Resources Corp vs. Barnes Group
Performance |
| Timeline |
| Scottie Resources Corp |
| Barnes Group |
Scottie Resources and Barnes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottie Resources and Barnes
The main advantage of trading using opposite Scottie Resources and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottie Resources 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.| Scottie Resources vs. HUMANA INC | Scottie Resources vs. SCOR PK | Scottie Resources vs. Aquagold International | Scottie Resources vs. Thrivent High Yield |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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