Correlation Between Barrett Business and Preformed Line

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

By analyzing existing cross correlation between Barrett Business Services and Preformed Line Products, you can compare the effects of market volatilities on Barrett Business and Preformed Line 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 Barrett Business with a short position of Preformed Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrett Business and Preformed Line.

Diversification Opportunities for Barrett Business and Preformed Line

-0.11

Correlation Coefficient

Barrett Business  Preformed Line

Good diversification

The 3 months correlation between Barrett and Preformed is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Barrett Business Services and Preformed Line Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Preformed Line Products and Barrett Business 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 Barrett Business Services are associated (or correlated) with Preformed Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Preformed Line Products has no effect on the direction of Barrett Business i.e., Barrett Business and Preformed Line go up and down completely randomly.

Pair Corralation between Barrett Business and Preformed Line

Given the investment horizon of 90 days Barrett Business is expected to generate 4.09 times less return on investment than Preformed Line. But when comparing it to its historical volatility, Barrett Business Services is 1.52 times less risky than Preformed Line. It trades about 0.09 of its potential returns per unit of risk. Preformed Line Products is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  20,486  in Preformed Line Products on September 15, 2025 and sell it today you would earn a total of  2,692  from holding Preformed Line Products or generate 13.14% return on investment over 90 days.

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

Barrett Business Services  vs.  Preformed Line Products

Barrett Business Services

Risk-Adjusted Performance

Weakest

Over the last 90 days Barrett Business Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2026. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Preformed Line Products

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Preformed Line Products are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Preformed Line exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barrett Business and Preformed Line

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

The idea behind Barrett Business Services and Preformed Line Products 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.