Correlation Between Barnes and Samfine Creation

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

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

Diversification Opportunities for Barnes and Samfine Creation

0.64

Correlation Coefficient

Barnes  Samfine Creation

Poor diversification

The 3 months correlation between Barnes and Samfine is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Samfine Creation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samfine Creation Holdings 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 Samfine Creation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samfine Creation Holdings has no effect on the direction of Barnes i.e., Barnes and Samfine Creation go up and down completely randomly.

Pair Corralation between Barnes and Samfine Creation

Taking into account the 90-day investment horizon Barnes Group is expected to generate 0.09 times more return on investment than Samfine Creation. However, Barnes Group is 10.59 times less risky than Samfine Creation. It trades about 0.2 of its potential returns per unit of risk. Samfine Creation Holdings is currently generating about 0.01 per unit of risk. If you would invest  3,774  in Barnes Group on September 16, 2024 and sell it today you would earn a total of  933.00  from holding Barnes Group or generate 24.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	67.69%
Values	Daily Returns

Barnes Group  vs.  Samfine Creation Holdings

Barnes Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 15 (%) 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.

Samfine Creation Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samfine Creation Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak technical indicators, Samfine Creation reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barnes and Samfine Creation

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

The idea behind Barnes Group and Samfine Creation Holdings 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.