Correlation Between Badger Meter and Trimble
Can any of the company-specific risk be diversified away by investing in both Badger Meter and Trimble 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 Trimble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Badger Meter and Trimble, you can compare the effects of market volatilities on Badger Meter and Trimble 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 Trimble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Badger Meter and Trimble.
Diversification Opportunities for Badger Meter and Trimble
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Badger and Trimble is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Badger Meter and Trimble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimble 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 Trimble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimble has no effect on the direction of Badger Meter i.e., Badger Meter and Trimble go up and down completely randomly.
Pair Corralation between Badger Meter and Trimble
Considering the 90-day investment horizon Badger Meter is expected to generate 1.05 times more return on investment than Trimble. However, Badger Meter is 1.05 times more volatile than Trimble. It trades about 0.1 of its potential returns per unit of risk. Trimble is currently generating about 0.06 per unit of risk. If you would invest 15,796 in Badger Meter on August 27, 2024 and sell it today you would earn a total of 6,304 from holding Badger Meter or generate 39.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Badger Meter vs. Trimble
Performance |
| Timeline |
| Badger Meter |
| Trimble |
Badger Meter and Trimble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Badger Meter and Trimble
The main advantage of trading using opposite Badger Meter and Trimble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Badger Meter position performs unexpectedly, Trimble 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 Trimble will offset losses from the drop in Trimble's long position.| Badger Meter vs. ESCO Technologies | Badger Meter vs. Genasys | Badger Meter vs. Cepton Inc | Badger Meter vs. Darkpulse |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |