Correlation Between Nano Nuclear and Barnes

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

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

Diversification Opportunities for Nano Nuclear and Barnes

0.78

Correlation Coefficient

Nano Nuclear  Barnes

Poor diversification

The 3 months correlation between Nano and Barnes is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nano Nuclear Energy and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and Nano Nuclear 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 Nano Nuclear Energy 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 Nano Nuclear i.e., Nano Nuclear and Barnes go up and down completely randomly.

Pair Corralation between Nano Nuclear and Barnes

Considering the 90-day investment horizon Nano Nuclear Energy is expected to generate 84.32 times more return on investment than Barnes. However, Nano Nuclear is 84.32 times more volatile than Barnes Group. It trades about 0.08 of its potential returns per unit of risk. Barnes Group is currently generating about 0.27 per unit of risk. If you would invest  2,160  in Nano Nuclear Energy on September 12, 2024 and sell it today you would earn a total of  175.00  from holding Nano Nuclear Energy or generate 8.1% return on investment over 90 days.

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

Nano Nuclear Energy  vs.  Barnes Group

Nano Nuclear Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Nuclear Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Nano Nuclear exhibited solid returns over the last few months and may actually be approaching a breakup point.

Barnes Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 17 (%) 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.

Pair Trading with Nano Nuclear and Barnes

The main advantage of trading using opposite Nano Nuclear and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano Nuclear 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 Nano Nuclear Energy 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.