Correlation Between Barnes and Kuehne +

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

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

Diversification Opportunities for Barnes and Kuehne +

0.69

Correlation Coefficient

Barnes  Kuehne +

Poor diversification

The 3 months correlation between Barnes and Kuehne is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Kuehne Nagel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuehne Nagel Interna 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 Kuehne +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuehne Nagel Interna has no effect on the direction of Barnes i.e., Barnes and Kuehne + go up and down completely randomly.

Pair Corralation between Barnes and Kuehne +

Taking into account the 90-day investment horizon Barnes is expected to generate 3.84 times less return on investment than Kuehne +. But when comparing it to its historical volatility, Barnes Group is 23.23 times less risky than Kuehne +. It trades about 0.34 of its potential returns per unit of risk. Kuehne Nagel International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  22,949  in Kuehne Nagel International on December 28, 2024 and sell it today you would earn a total of  1,176  from holding Kuehne Nagel International or generate 5.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	30.0%
Values	Daily Returns

Barnes Group  vs.  Kuehne Nagel International

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.

Kuehne Nagel Interna

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kuehne Nagel International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Kuehne + is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Barnes and Kuehne +

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

The idea behind Barnes Group and Kuehne Nagel International 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..