Correlation Between Fortive Corp and Spectris Plc
Can any of the company-specific risk be diversified away by investing in both Fortive Corp and Spectris Plc 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 Fortive Corp and Spectris Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortive Corp and Spectris plc, you can compare the effects of market volatilities on Fortive Corp and Spectris Plc 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 Fortive Corp with a short position of Spectris Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortive Corp and Spectris Plc.
Diversification Opportunities for Fortive Corp and Spectris Plc
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fortive and Spectris is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fortive Corp and Spectris plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectris plc and Fortive Corp 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 Fortive Corp are associated (or correlated) with Spectris Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectris plc has no effect on the direction of Fortive Corp i.e., Fortive Corp and Spectris Plc go up and down completely randomly.
Pair Corralation between Fortive Corp and Spectris Plc
Considering the 90-day investment horizon Fortive Corp is expected to generate 2.11 times less return on investment than Spectris Plc. But when comparing it to its historical volatility, Fortive Corp is 3.85 times less risky than Spectris Plc. It trades about 0.35 of its potential returns per unit of risk. Spectris plc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,997 in Spectris plc on October 22, 2024 and sell it today you would earn a total of 358.00 from holding Spectris plc or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortive Corp vs. Spectris plc
Performance |
| Timeline |
| Fortive Corp |
| Spectris plc |
Fortive Corp and Spectris Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortive Corp and Spectris Plc
The main advantage of trading using opposite Fortive Corp and Spectris Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortive Corp position performs unexpectedly, Spectris Plc 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 Spectris Plc will offset losses from the drop in Spectris Plc's long position.| Fortive Corp vs. Vishay Precision Group | Fortive Corp vs. Sensata Technologies Holding | Fortive Corp vs. Badger Meter | Fortive Corp vs. Trimble |
| Spectris Plc vs. Track Group | Spectris Plc vs. Sono Tek Corp | Spectris Plc vs. Mind Technology | Spectris Plc vs. Electro Sensors |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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