Correlation Between Badger Meter and Novanta
Can any of the company-specific risk be diversified away by investing in both Badger Meter and Novanta 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 Badger Meter and Novanta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Badger Meter and Novanta, you can compare the effects of market volatilities on Badger Meter and Novanta 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 Badger Meter with a short position of Novanta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Badger Meter and Novanta.
Diversification Opportunities for Badger Meter and Novanta
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Badger and Novanta is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Badger Meter and Novanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novanta and Badger Meter 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 Badger Meter are associated (or correlated) with Novanta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novanta has no effect on the direction of Badger Meter i.e., Badger Meter and Novanta go up and down completely randomly.
Pair Corralation between Badger Meter and Novanta
Considering the 90-day investment horizon Badger Meter is expected to generate 0.83 times more return on investment than Novanta. However, Badger Meter is 1.21 times less risky than Novanta. It trades about 0.07 of its potential returns per unit of risk. Novanta is currently generating about 0.0 per unit of risk. If you would invest 11,965 in Badger Meter on November 2, 2024 and sell it today you would earn a total of 9,492 from holding Badger Meter or generate 79.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Badger Meter vs. Novanta
Performance |
| Timeline |
| Badger Meter |
| Novanta |
Badger Meter and Novanta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Badger Meter and Novanta
The main advantage of trading using opposite Badger Meter and Novanta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Badger Meter position performs unexpectedly, Novanta 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 Novanta will offset losses from the drop in Novanta's long position.| Badger Meter vs. ESCO Technologies | Badger Meter vs. Novanta | Badger Meter vs. Sensata Technologies Holding | Badger Meter vs. Fortive Corp |
| Novanta vs. Mesa Laboratories | Novanta vs. Itron Inc | Novanta vs. Fortive Corp | Novanta vs. Vishay Precision Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |