Correlation Between Garmin and Topcon
Can any of the company-specific risk be diversified away by investing in both Garmin and Topcon 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 Topcon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garmin and Topcon, you can compare the effects of market volatilities on Garmin and Topcon 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 Topcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garmin and Topcon.
Diversification Opportunities for Garmin and Topcon
Very good diversification
The 3 months correlation between Garmin and Topcon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Garmin and Topcon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topcon 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 Topcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topcon has no effect on the direction of Garmin i.e., Garmin and Topcon go up and down completely randomly.
Pair Corralation between Garmin and Topcon
Given the investment horizon of 90 days Garmin is expected to generate 1.16 times more return on investment than Topcon. However, Garmin is 1.16 times more volatile than Topcon. It trades about 0.24 of its potential returns per unit of risk. Topcon is currently generating about -0.03 per unit of risk. If you would invest 16,629 in Garmin on August 27, 2024 and sell it today you would earn a total of 4,404 from holding Garmin or generate 26.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garmin vs. Topcon
Performance |
| Timeline |
| Garmin |
| Topcon |
Garmin and Topcon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garmin and Topcon
The main advantage of trading using opposite Garmin and Topcon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garmin position performs unexpectedly, Topcon 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 Topcon will offset losses from the drop in Topcon's long position.| Garmin vs. Vontier Corp | Garmin vs. Teledyne Technologies Incorporated | Garmin vs. ESCO Technologies | Garmin vs. MKS Instruments |
| Topcon vs. Teledyne Technologies Incorporated | Topcon vs. Fortive Corp | Topcon vs. MKS Instruments | Topcon vs. Cognex |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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