Correlation Between Ingersoll Rand and Barnes

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

Diversification Opportunities for Ingersoll Rand and Barnes

0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Ingersoll and Barnes is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ingersoll Rand and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group and Ingersoll Rand 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 Ingersoll Rand 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 Ingersoll Rand i.e., Ingersoll Rand and Barnes go up and down completely randomly.

Pair Corralation between Ingersoll Rand and Barnes

Allowing for the 90-day total investment horizon Ingersoll Rand is expected to generate 0.85 times more return on investment than Barnes. However, Ingersoll Rand is 1.18 times less risky than Barnes. It trades about 0.05 of its potential returns per unit of risk. Barnes Group is currently generating about 0.0 per unit of risk. If you would invest  2,808  in Ingersoll Rand on March 30, 2022 and sell it today you would earn a total of  1,473  from holding Ingersoll Rand or generate 52.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Ingersoll Rand  vs.  Barnes Group

 Performance (%) 
      Timeline 
Ingersoll Rand 
Ingersoll Performance
0 of 100
Over the last 90 days Ingersoll Rand has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in July 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0018
Payout Ratio
0.0273
Last Split Factor
1252:1000
Forward Annual Dividend Rate
0.08
Dividend Date
2022-06-22
Ex Dividend Date
2022-05-19
Last Split Date
2013-12-02

Ingersoll Price Channel

Barnes Group 
Barnes Performance
0 of 100
Over the last 90 days Barnes Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0199
Payout Ratio
0.33
Last Split Factor
2:1
Forward Annual Dividend Rate
0.64
Dividend Date
2022-06-10
Ex Dividend Date
2022-05-25
Last Split Date
2006-06-12

Barnes Price Channel

Ingersoll Rand and Barnes Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Ingersoll Rand and Barnes

The main advantage of trading using opposite Ingersoll Rand and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingersoll Rand 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 Ingersoll Rand 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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