Correlation Between Barnes and Blue Sphere

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Can any of the company-specific risk be diversified away by investing in both Barnes and Blue Sphere 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 Barnes and Blue Sphere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Blue Sphere Corp, you can compare the effects of market volatilities on Barnes and Blue Sphere 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 Barnes with a short position of Blue Sphere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Blue Sphere.

Diversification Opportunities for Barnes and Blue Sphere

BarnesBlueDiversified AwayBarnesBlueDiversified Away100%
-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Barnes and Blue is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Blue Sphere Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sphere Corp and Barnes 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 Barnes Group are associated (or correlated) with Blue Sphere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sphere Corp has no effect on the direction of Barnes i.e., Barnes and Blue Sphere go up and down completely randomly.

Pair Corralation between Barnes and Blue Sphere

Taking into account the 90-day investment horizon Barnes is expected to generate 3405.41 times less return on investment than Blue Sphere. But when comparing it to its historical volatility, Barnes Group is 3932.92 times less risky than Blue Sphere. It trades about 0.4 of its potential returns per unit of risk. Blue Sphere Corp is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Blue Sphere Corp on November 15, 2024 and sell it today you would lose (0.01) from holding Blue Sphere Corp or give up 100.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy81.03%
ValuesDaily Returns

Barnes Group  vs.  Blue Sphere Corp

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 020406080100
JavaScript chart by amCharts 3.21.15B BLSP
       Timeline  
Barnes Group 

Risk-Adjusted Performance

Very Strong

 
Weak
 
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.
Blue Sphere Corp 

Risk-Adjusted Performance

Very Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Blue Sphere Corp are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Blue Sphere reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb

Barnes and Blue Sphere Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.21-0.0871-0.0576-0.02810.00.03050.06420.09790.29 51015202530
JavaScript chart by amCharts 3.21.15B BLSP
       Returns  

Pair Trading with Barnes and Blue Sphere

The main advantage of trading using opposite Barnes and Blue Sphere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Blue Sphere 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 Blue Sphere will offset losses from the drop in Blue Sphere's long position.
The idea behind Barnes Group and Blue Sphere Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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