Correlation Between Barnes and Ampco Pittsburgh
Can any of the company-specific risk be diversified away by investing in both Barnes and Ampco Pittsburgh 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 Ampco Pittsburgh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and Ampco Pittsburgh, you can compare the effects of market volatilities on Barnes and Ampco Pittsburgh 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 Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Ampco Pittsburgh.
Diversification Opportunities for Barnes and Ampco Pittsburgh
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barnes and Ampco is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh 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 Ampco Pittsburgh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampco Pittsburgh has no effect on the direction of Barnes i.e., Barnes and Ampco Pittsburgh go up and down completely randomly.
Pair Corralation between Barnes and Ampco Pittsburgh
Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.46 times more return on investment than Ampco Pittsburgh. However, Barnes Group is 2.17 times less risky than Ampco Pittsburgh. It trades about -0.04 of its potential returns per unit of risk. Ampco Pittsburgh is currently generating about -0.08 per unit of risk. If you would invest 3,709 in Barnes Group on January 20, 2024 and sell it today you would lose (101.00) from holding Barnes Group or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Group vs. Ampco Pittsburgh
Performance |
| Timeline |
| Barnes Group |
| Ampco Pittsburgh |
Barnes and Ampco Pittsburgh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and Ampco Pittsburgh
The main advantage of trading using opposite Barnes and Ampco Pittsburgh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Ampco Pittsburgh 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 Ampco Pittsburgh will offset losses from the drop in Ampco Pittsburgh's long position.The idea behind Barnes Group and Ampco Pittsburgh 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.| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. ESAB Corp | Ampco Pittsburgh vs. Gulf Island Fabrication |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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