Correlation Between Makita Corp and Husqvarna
Can any of the company-specific risk be diversified away by investing in both Makita Corp and Husqvarna 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 Makita Corp and Husqvarna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Makita Corp and Husqvarna AB, you can compare the effects of market volatilities on Makita Corp and Husqvarna 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 Makita Corp with a short position of Husqvarna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makita Corp and Husqvarna.
Diversification Opportunities for Makita Corp and Husqvarna
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Makita and Husqvarna is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Makita Corp and Husqvarna AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husqvarna AB and Makita 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 Makita Corp are associated (or correlated) with Husqvarna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husqvarna AB has no effect on the direction of Makita Corp i.e., Makita Corp and Husqvarna go up and down completely randomly.
Pair Corralation between Makita Corp and Husqvarna
If you would invest 2,720 in Makita Corp on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Makita Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.38% |
| Values | Daily Returns |
Makita Corp vs. Husqvarna AB
Performance |
| Timeline |
| Makita Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Husqvarna AB |
Makita Corp and Husqvarna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Makita Corp and Husqvarna
The main advantage of trading using opposite Makita Corp and Husqvarna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makita Corp position performs unexpectedly, Husqvarna 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 Husqvarna will offset losses from the drop in Husqvarna's long position.| Makita Corp vs. Snap On | Makita Corp vs. Stanley Black Decker | Makita Corp vs. Eastern Co | Makita Corp vs. Hillman Solutions Corp |
| Husqvarna vs. SMC Corp Japan | Husqvarna vs. Hong Kong Exchange | Husqvarna vs. AIA Group Ltd | Husqvarna vs. Techtronic Industries |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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