Correlation Between Hurco Companies and Barnes

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

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

Diversification Opportunities for Hurco Companies and Barnes

-0.61

Correlation Coefficient

Hurco Companies  Barnes

Excellent diversification

The 3 months correlation between Hurco and Barnes is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and Hurco Companies 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 Hurco Companies are associated (or correlated) with Barnes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barnes Group has no effect on the direction of Hurco Companies i.e., Hurco Companies and Barnes go up and down completely randomly.

Pair Corralation between Hurco Companies and Barnes

Given the investment horizon of 90 days Hurco Companies is expected to under-perform the Barnes. But the stock apears to be less risky and, when comparing its historical volatility, Hurco Companies is 1.0 times less risky than Barnes. The stock trades about -0.01 of its potential returns per unit of risk. The Barnes Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4,217  in Barnes Group on October 21, 2024 and sell it today you would earn a total of  514.00  from holding Barnes Group or generate 12.19% return on investment over 90 days.

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

Hurco Companies  vs.  Barnes Group

Hurco Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hurco Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hurco Companies is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Barnes Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Hurco Companies and Barnes

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

The idea behind Hurco Companies and Barnes Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.