Correlation Between Ballard Power and Barnes
Can any of the company-specific risk be diversified away by investing in both Ballard Power 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 Ballard Power and Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ballard Power Systems and Barnes Group, you can compare the effects of market volatilities on Ballard Power 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 Ballard Power with a short position of Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballard Power and Barnes.
Diversification Opportunities for Ballard Power and Barnes
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ballard and Barnes is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ballard Power Systems and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and Ballard Power 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 Ballard Power Systems 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 Ballard Power i.e., Ballard Power and Barnes go up and down completely randomly.
Pair Corralation between Ballard Power and Barnes
Given the investment horizon of 90 days Ballard Power Systems is expected to under-perform the Barnes. In addition to that, Ballard Power is 1.86 times more volatile than Barnes Group. It trades about -0.03 of its total potential returns per unit of risk. Barnes Group is currently generating about -0.04 per unit of volatility. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ballard Power Systems vs. Barnes Group
Performance |
| Timeline |
| Ballard Power Systems |
| Barnes Group |
Ballard Power and Barnes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ballard Power and Barnes
The main advantage of trading using opposite Ballard Power and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballard Power 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.| Ballard Power vs. Dover | Ballard Power vs. Parker Hannifin | Ballard Power vs. Pentair PLC | Ballard Power vs. Illinois Tool Works |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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