Correlation Between Ecosphere Technologies and Barnes

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

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

Diversification Opportunities for Ecosphere Technologies and Barnes

0.0

Correlation Coefficient

Ecosphere Technologies  Barnes

Pay attention - limited upside

The 3 months correlation between Ecosphere and Barnes is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecosphere Technologies and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and Ecosphere Technologies 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 Ecosphere Technologies 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 Ecosphere Technologies i.e., Ecosphere Technologies and Barnes go up and down completely randomly.

Pair Corralation between Ecosphere Technologies and Barnes

If you would invest  3,603  in Barnes Group on February 7, 2024 and sell it today you would earn a total of  123.00  from holding Barnes Group or generate 3.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ecosphere Technologies  vs.  Barnes Group

Ecosphere Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecosphere Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Ecosphere Technologies is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Barnes Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Barnes may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Ecosphere Technologies and Barnes

The main advantage of trading using opposite Ecosphere Technologies and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecosphere Technologies 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 Ecosphere Technologies 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.