Correlation Between CIRCOR International and Barnes

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Can any of the company-specific risk be diversified away by investing in both CIRCOR International 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 CIRCOR International and Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIRCOR International and Barnes Group, you can compare the effects of market volatilities on CIRCOR International 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 CIRCOR International with a short position of Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIRCOR International and Barnes.

Diversification Opportunities for CIRCOR International and Barnes

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between CIRCOR and Barnes is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CIRCOR International and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and CIRCOR International 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 CIRCOR International 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 CIRCOR International i.e., CIRCOR International and Barnes go up and down completely randomly.

Pair Corralation between CIRCOR International and Barnes

Considering the 90-day investment horizon CIRCOR International is expected to generate 3.33 times less return on investment than Barnes. But when comparing it to its historical volatility, CIRCOR International is 1.84 times less risky than Barnes. It trades about 0.03 of its potential returns per unit of risk. Barnes Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,298  in Barnes Group on December 29, 2023 and sell it today you would earn a total of  415.00  from holding Barnes Group or generate 12.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy10.48%
ValuesDaily Returns

CIRCOR International  vs.  Barnes Group

 Performance 
       Timeline  
CIRCOR International 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days CIRCOR International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, CIRCOR International is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
Barnes Group 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, Barnes sustained solid returns over the last few months and may actually be approaching a breakup point.

CIRCOR International and Barnes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CIRCOR International and Barnes

The main advantage of trading using opposite CIRCOR International and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIRCOR International 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 CIRCOR International 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.
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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