Correlation Between Barnes and TOYO Co,

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

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

Diversification Opportunities for Barnes and TOYO Co,

0.09

Correlation Coefficient

Barnes  TOYO Co,

Significant diversification

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

Pair Corralation between Barnes and TOYO Co,

Taking into account the 90-day investment horizon Barnes is expected to generate 3.34 times less return on investment than TOYO Co,. But when comparing it to its historical volatility, Barnes Group is 6.08 times less risky than TOYO Co,. It trades about 0.03 of its potential returns per unit of risk. TOYO Co, Ltd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  870.00  in TOYO Co, Ltd on September 19, 2024 and sell it today you would lose (520.00) from holding TOYO Co, Ltd or give up 59.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	24.4%
Values	Daily Returns

Barnes Group  vs.  TOYO Co, Ltd

Barnes Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Barnes sustained solid returns over the last few months and may actually be approaching a breakup point.

TOYO Co,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TOYO Co, Ltd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, TOYO Co, displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barnes and TOYO Co,

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

The idea behind Barnes Group and TOYO Co, Ltd 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.