Correlation Between Trimble and Liberty International
Can any of the company-specific risk be diversified away by investing in both Trimble and Liberty International 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 Liberty International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trimble and Liberty International Holding, you can compare the effects of market volatilities on Trimble and Liberty International 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 Liberty International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimble and Liberty International.
Diversification Opportunities for Trimble and Liberty International
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trimble and Liberty is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Trimble and Liberty International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty International 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 Liberty International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty International has no effect on the direction of Trimble i.e., Trimble and Liberty International go up and down completely randomly.
Pair Corralation between Trimble and Liberty International
If you would invest 6,971 in Trimble on November 3, 2024 and sell it today you would earn a total of 525.00 from holding Trimble or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Trimble vs. Liberty International Holding
Performance |
| Timeline |
| Trimble |
| Liberty International |
Trimble and Liberty International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trimble and Liberty International
The main advantage of trading using opposite Trimble and Liberty International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trimble position performs unexpectedly, Liberty International 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 Liberty International will offset losses from the drop in Liberty International's long position.| Trimble vs. Fortive Corp | Trimble vs. MKS Instruments | Trimble vs. Novanta | Trimble vs. Vishay Precision Group |
| Liberty International vs. Greene Concepts | Liberty International vs. Fbec Worldwide | Liberty International vs. National Beverage Corp | Liberty International vs. Vita Coco |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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