Correlation Between Trimble and HEXAGON AB
Can any of the company-specific risk be diversified away by investing in both Trimble 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 Trimble and HEXAGON AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trimble and HEXAGON AB ADR1, you can compare the effects of market volatilities on Trimble 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 Trimble with a short position of HEXAGON AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimble and HEXAGON AB.
Diversification Opportunities for Trimble and HEXAGON AB
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trimble and HEXAGON is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Trimble and HEXAGON AB ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXAGON AB ADR1 and Trimble 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 Trimble 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 ADR1 has no effect on the direction of Trimble i.e., Trimble and HEXAGON AB go up and down completely randomly.
Pair Corralation between Trimble and HEXAGON AB
Assuming the 90 days horizon Trimble is expected to generate 1.6 times more return on investment than HEXAGON AB. However, Trimble is 1.6 times more volatile than HEXAGON AB ADR1. It trades about 0.25 of its potential returns per unit of risk. HEXAGON AB ADR1 is currently generating about -0.11 per unit of risk. If you would invest 5,586 in Trimble on September 2, 2024 and sell it today you would earn a total of 1,290 from holding Trimble or generate 23.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trimble vs. HEXAGON AB ADR1
Performance |
| Timeline |
| Trimble |
| HEXAGON AB ADR1 |
Trimble and HEXAGON AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trimble and HEXAGON AB
The main advantage of trading using opposite Trimble and HEXAGON AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trimble 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.| Trimble vs. Genco Shipping Trading | Trimble vs. Insteel Industries | Trimble vs. JAPAN TOBACCO UNSPADR12 | Trimble vs. GFL ENVIRONM |
| HEXAGON AB vs. Superior Plus Corp | HEXAGON AB vs. NMI Holdings | HEXAGON AB vs. Origin Agritech | HEXAGON AB vs. SIVERS SEMICONDUCTORS AB |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |