Correlation Between HomeToGo and Trimble
Can any of the company-specific risk be diversified away by investing in both HomeToGo 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 HomeToGo and Trimble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and Trimble, you can compare the effects of market volatilities on HomeToGo 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 HomeToGo with a short position of Trimble. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and Trimble.
Diversification Opportunities for HomeToGo and Trimble
Very weak diversification
The 3 months correlation between HomeToGo and Trimble is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and Trimble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimble and HomeToGo 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 HomeToGo SE 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 HomeToGo i.e., HomeToGo and Trimble go up and down completely randomly.
Pair Corralation between HomeToGo and Trimble
Assuming the 90 days trading horizon HomeToGo is expected to generate 1.96 times less return on investment than Trimble. In addition to that, HomeToGo is 1.65 times more volatile than Trimble. It trades about 0.02 of its total potential returns per unit of risk. Trimble is currently generating about 0.05 per unit of volatility. If you would invest 4,565 in Trimble on September 14, 2024 and sell it today you would earn a total of 2,453 from holding Trimble or generate 53.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeToGo SE vs. Trimble
Performance |
| Timeline |
| HomeToGo SE |
| Trimble |
HomeToGo and Trimble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and Trimble
The main advantage of trading using opposite HomeToGo and Trimble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo 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.| HomeToGo vs. Tencent Holdings | HomeToGo vs. Superior Plus Corp | HomeToGo vs. SIVERS SEMICONDUCTORS AB | HomeToGo vs. NorAm Drilling AS |
| Trimble vs. AXWAY SOFTWARE EO | Trimble vs. Guidewire Software | Trimble vs. ATOSS SOFTWARE | Trimble vs. AUTO TRADER ADR |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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