Correlation Between ATVRockN and Barnes

Can any of the company-specific risk be diversified away by investing in both ATVRockN 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 ATVRockN and Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATVRockN and Barnes Group, you can compare the effects of market volatilities on ATVRockN 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 ATVRockN with a short position of Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATVRockN and Barnes.

Diversification Opportunities for ATVRockN and Barnes

0.0

Correlation Coefficient

ATVRockN  Barnes

Pay attention - limited upside

The 3 months correlation between ATVRockN and Barnes is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ATVRockN and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and ATVRockN 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 ATVRockN 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 ATVRockN i.e., ATVRockN and Barnes go up and down completely randomly.

Pair Corralation between ATVRockN and Barnes

Given the investment horizon of 90 days ATVRockN is expected to generate 207.58 times more return on investment than Barnes. However, ATVRockN is 207.58 times more volatile than Barnes Group. It trades about 0.1 of its potential returns per unit of risk. Barnes Group is currently generating about 0.34 per unit of risk. If you would invest  0.07  in ATVRockN on December 28, 2024 and sell it today you would earn a total of  0.02  from holding ATVRockN or generate 28.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	29.51%
Values	Daily Returns

ATVRockN  vs.  Barnes Group

ATVRockN

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATVRockN are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, ATVRockN disclosed solid returns over the last few months and may actually be approaching a breakup point.

Barnes Group

Risk-Adjusted Performance

Strong

Over the last 90 days Barnes Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Barnes is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ATVRockN and Barnes

The main advantage of trading using opposite ATVRockN and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATVRockN 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.

The idea behind ATVRockN and Barnes Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.