Correlation Between Barnes and Globus Maritime

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

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

Diversification Opportunities for Barnes and Globus Maritime

0.09

Correlation Coefficient

Barnes  Globus Maritime

Significant diversification

The 3 months correlation between Barnes and Globus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Globus Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Maritime 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 Globus Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Maritime has no effect on the direction of Barnes i.e., Barnes and Globus Maritime go up and down completely randomly.

Pair Corralation between Barnes and Globus Maritime

Taking into account the 90-day investment horizon Barnes is expected to generate 6.8 times less return on investment than Globus Maritime. But when comparing it to its historical volatility, Barnes Group is 44.73 times less risky than Globus Maritime. It trades about 0.45 of its potential returns per unit of risk. Globus Maritime is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  113.00  in Globus Maritime on December 21, 2024 and sell it today you would earn a total of  12.00  from holding Globus Maritime or generate 10.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	37.29%
Values	Daily Returns

Barnes Group  vs.  Globus Maritime

Barnes Group

Risk-Adjusted Performance

Very 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.

Globus Maritime

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Globus Maritime are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Globus Maritime unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barnes and Globus Maritime

The main advantage of trading using opposite Barnes and Globus Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Globus Maritime 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 Globus Maritime will offset losses from the drop in Globus Maritime's long position.

The idea behind Barnes Group and Globus Maritime 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.