Correlation Between Barrett Business and ZENERGY B

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

By analyzing existing cross correlation between Barrett Business Services and ZENERGY B AB, you can compare the effects of market volatilities on Barrett Business and ZENERGY B 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 Barrett Business with a short position of ZENERGY B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrett Business and ZENERGY B.

Diversification Opportunities for Barrett Business and ZENERGY B

0.25

Correlation Coefficient

Barrett Business  ZENERGY B

Modest diversification

The 3 months correlation between Barrett and ZENERGY is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Barrett Business Services and ZENERGY B AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZENERGY B AB and Barrett Business 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 Barrett Business Services are associated (or correlated) with ZENERGY B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZENERGY B AB has no effect on the direction of Barrett Business i.e., Barrett Business and ZENERGY B go up and down completely randomly.

Pair Corralation between Barrett Business and ZENERGY B

If you would invest (100.00) in ZENERGY B AB on December 5, 2024 and sell it today you would earn a total of  100.00  from holding ZENERGY B AB or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Barrett Business Services  vs.  ZENERGY B AB

Barrett Business Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Barrett Business Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ZENERGY B AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZENERGY B AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ZENERGY B is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Barrett Business and ZENERGY B

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

The idea behind Barrett Business Services and ZENERGY B AB 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.