Correlation Between BAXTER and FARO Technologies
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By analyzing existing cross correlation between BAXTER INTL INC and FARO Technologies, you can compare the effects of market volatilities on BAXTER and FARO Technologies 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 BAXTER with a short position of FARO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAXTER and FARO Technologies.
Diversification Opportunities for BAXTER and FARO Technologies
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BAXTER and FARO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BAXTER INTL INC and FARO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARO Technologies and BAXTER 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 BAXTER INTL INC are associated (or correlated) with FARO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARO Technologies has no effect on the direction of BAXTER i.e., BAXTER and FARO Technologies go up and down completely randomly.
Pair Corralation between BAXTER and FARO Technologies
Assuming the 90 days trading horizon BAXTER INTL INC is expected to under-perform the FARO Technologies. But the bond apears to be less risky and, when comparing its historical volatility, BAXTER INTL INC is 8.11 times less risky than FARO Technologies. The bond trades about -0.02 of its potential returns per unit of risk. The FARO Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,146 in FARO Technologies on September 12, 2024 and sell it today you would earn a total of 574.00 from holding FARO Technologies or generate 26.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.76% |
| Values | Daily Returns |
BAXTER INTL INC vs. FARO Technologies
Performance |
| Timeline |
| BAXTER INTL INC |
| FARO Technologies |
BAXTER and FARO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAXTER and FARO Technologies
The main advantage of trading using opposite BAXTER and FARO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAXTER position performs unexpectedly, FARO Technologies 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 FARO Technologies will offset losses from the drop in FARO Technologies' long position.| BAXTER vs. FARO Technologies | BAXTER vs. Arrow Electronics | BAXTER vs. Analog Devices | BAXTER vs. Lifevantage |
| FARO Technologies vs. Coherent | FARO Technologies vs. ESCO Technologies | FARO Technologies vs. Mesa Laboratories | FARO Technologies vs. Vishay Precision Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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