Correlation Between Bar Harbor and CompX International

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

By analyzing existing cross correlation between Bar Harbor Bankshares and CompX International, you can compare the effects of market volatilities on Bar Harbor and CompX International 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 Bar Harbor with a short position of CompX International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bar Harbor and CompX International.

Diversification Opportunities for Bar Harbor and CompX International

0.09

Correlation Coefficient

Bar Harbor  CompX International

Significant diversification

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

Pair Corralation between Bar Harbor and CompX International

Considering the 90-day investment horizon Bar Harbor Bankshares is expected to generate 0.66 times more return on investment than CompX International. However, Bar Harbor Bankshares is 1.51 times less risky than CompX International. It trades about 0.02 of its potential returns per unit of risk. CompX International is currently generating about -0.1 per unit of risk. If you would invest  2,998  in Bar Harbor Bankshares on December 27, 2024 and sell it today you would earn a total of  47.00  from holding Bar Harbor Bankshares or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bar Harbor Bankshares  vs.  CompX International

Bar Harbor Bankshares

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bar Harbor Bankshares are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, Bar Harbor is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CompX International

Risk-Adjusted Performance

Very Weak

Over the last 90 days CompX International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Bar Harbor and CompX International

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

The idea behind Bar Harbor Bankshares and CompX 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.