Correlation Between Danaher and Danaher

Can any of the company-specific risk be diversified away by investing in both Danaher and Danaher 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 Danaher and Danaher into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Danaher and Danaher, you can compare the effects of market volatilities on Danaher 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 Danaher with a short position of Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danaher and Danaher.

Diversification Opportunities for Danaher and Danaher

0.99

Correlation Coefficient

Danaher  Danaher

No risk reduction

The 3 months correlation between Danaher and Danaher is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Danaher and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher and Danaher 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 Danaher 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 has no effect on the direction of Danaher i.e., Danaher and Danaher go up and down completely randomly.

Pair Corralation between Danaher and Danaher

Assuming the 90 days horizon Danaher is expected to generate 1.01 times more return on investment than Danaher. However, Danaher is 1.01 times more volatile than Danaher. It trades about -0.12 of its potential returns per unit of risk. Danaher is currently generating about -0.12 per unit of risk. If you would invest  22,867  in Danaher on December 2, 2024 and sell it today you would lose (3,039) from holding Danaher or give up 13.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Danaher  vs.  Danaher

Danaher

Risk-Adjusted Performance

Very Weak

Over the last 90 days Danaher has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Danaher

Risk-Adjusted Performance

Very Weak

Over the last 90 days Danaher has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Danaher and Danaher

The main advantage of trading using opposite Danaher and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danaher 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.

The idea behind Danaher and Danaher pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.