Correlation Between Barnes and Ampco Pittsburgh

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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

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Barnes and Ampco is -0.43. 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 0.33 times more return on investment than Ampco Pittsburgh. However, Barnes Group is 3.04 times less risky than Ampco Pittsburgh. It trades about 0.15 of its potential returns per unit of risk. Ampco Pittsburgh is currently generating about -0.14 per unit of risk. If you would invest  3,545  in Barnes Group on December 29, 2023 and sell it today you would earn a total of  203.00  from holding Barnes Group or generate 5.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Barnes Group  vs.  Ampco-Pittsburgh

 Performance 
       Timeline  
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.
Ampco-Pittsburgh 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Ampco Pittsburgh has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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