Correlation Between 3M and DANAHER
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By analyzing existing cross correlation between 3M Company and DANAHER PORATION, you can compare the effects of market volatilities on 3M and DANAHER 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 3M with a short position of DANAHER. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and DANAHER.
Diversification Opportunities for 3M and DANAHER
Very good diversification
The 3 months correlation between 3M and DANAHER is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and DANAHER PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DANAHER PORATION and 3M 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 3M Company are associated (or correlated) with DANAHER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DANAHER PORATION has no effect on the direction of 3M i.e., 3M and DANAHER go up and down completely randomly.
Pair Corralation between 3M and DANAHER
Considering the 90-day investment horizon 3M Company is expected to generate 1.38 times more return on investment than DANAHER. However, 3M is 1.38 times more volatile than DANAHER PORATION. It trades about 0.03 of its potential returns per unit of risk. DANAHER PORATION is currently generating about -0.13 per unit of risk. If you would invest 14,933 in 3M Company on December 13, 2024 and sell it today you would earn a total of 91.00 from holding 3M Company or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
3M Company vs. DANAHER PORATION
Performance |
| Timeline |
| 3M Company |
| DANAHER PORATION |
3M and DANAHER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and DANAHER
The main advantage of trading using opposite 3M and DANAHER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, DANAHER 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 DANAHER will offset losses from the drop in DANAHER's long position.| 3M vs. MDU Resources Group | ||
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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