Correlation Between Garmin and Hexagon AB
Can any of the company-specific risk be diversified away by investing in both Garmin and Hexagon AB 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 Garmin and Hexagon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garmin and Hexagon AB, you can compare the effects of market volatilities on Garmin and Hexagon AB 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 Garmin with a short position of Hexagon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garmin and Hexagon AB.
Diversification Opportunities for Garmin and Hexagon AB
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Garmin and Hexagon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Garmin and Hexagon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexagon AB and Garmin 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 Garmin are associated (or correlated) with Hexagon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexagon AB has no effect on the direction of Garmin i.e., Garmin and Hexagon AB go up and down completely randomly.
Pair Corralation between Garmin and Hexagon AB
Given the investment horizon of 90 days Garmin is expected to generate 0.32 times more return on investment than Hexagon AB. However, Garmin is 3.08 times less risky than Hexagon AB. It trades about 0.31 of its potential returns per unit of risk. Hexagon AB is currently generating about -0.19 per unit of risk. If you would invest 19,835 in Garmin on September 1, 2024 and sell it today you would earn a total of 1,425 from holding Garmin or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garmin vs. Hexagon AB
Performance |
| Timeline |
| Garmin |
| Hexagon AB |
Garmin and Hexagon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garmin and Hexagon AB
The main advantage of trading using opposite Garmin and Hexagon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garmin position performs unexpectedly, Hexagon AB 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 Hexagon AB will offset losses from the drop in Hexagon AB's long position.| Garmin vs. Vontier Corp | Garmin vs. Teledyne Technologies Incorporated | Garmin vs. ESCO Technologies | Garmin vs. MKS Instruments |
| Hexagon AB vs. Keyence | Hexagon AB vs. Garmin | Hexagon AB vs. Keysight Technologies | Hexagon AB vs. Fortive Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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