Correlation Between Fortive Corp and Trimble
Can any of the company-specific risk be diversified away by investing in both Fortive Corp 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 Fortive Corp and Trimble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortive Corp and Trimble, you can compare the effects of market volatilities on Fortive Corp 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 Fortive Corp with a short position of Trimble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortive Corp and Trimble.
Diversification Opportunities for Fortive Corp and Trimble
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fortive and Trimble is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fortive Corp and Trimble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimble 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 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 Fortive Corp i.e., Fortive Corp and Trimble go up and down completely randomly.
Pair Corralation between Fortive Corp and Trimble
Considering the 90-day investment horizon Fortive Corp is expected to generate 1.42 times less return on investment than Trimble. But when comparing it to its historical volatility, Fortive Corp is 1.4 times less risky than Trimble. It trades about 0.03 of its potential returns per unit of risk. Trimble is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,985 in Trimble on August 24, 2024 and sell it today you would earn a total of 1,158 from holding Trimble or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortive Corp vs. Trimble
Performance |
| Timeline |
| Fortive Corp |
| Trimble |
Fortive Corp and Trimble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortive Corp and Trimble
The main advantage of trading using opposite Fortive Corp and Trimble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortive Corp 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.| Fortive Corp vs. Vishay Precision Group | Fortive Corp vs. Sensata Technologies Holding | Fortive Corp vs. Badger Meter | Fortive Corp vs. Trimble |
| Trimble vs. Fortive Corp | Trimble vs. MKS Instruments | Trimble vs. Novanta | Trimble 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |