Correlation Between Garmin and 26442CAP9

Can any of the company-specific risk be diversified away by investing in both Garmin and 26442CAP9 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 Garmin and 26442CAP9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Garmin and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on Garmin and 26442CAP9 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 Garmin with a short position of 26442CAP9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garmin and 26442CAP9.

Diversification Opportunities for Garmin and 26442CAP9

0.07

Correlation Coefficient

Garmin  26442CAP9

Significant diversification

The 3 months correlation between Garmin and 26442CAP9 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Garmin and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS and Garmin 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 Garmin are associated (or correlated) with 26442CAP9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY CAROLINAS has no effect on the direction of Garmin i.e., Garmin and 26442CAP9 go up and down completely randomly.

Pair Corralation between Garmin and 26442CAP9

Given the investment horizon of 90 days Garmin is expected to generate 2.89 times more return on investment than 26442CAP9. However, Garmin is 2.89 times more volatile than DUKE ENERGY CAROLINAS. It trades about 0.03 of its potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about 0.05 per unit of risk. If you would invest  20,992  in Garmin on December 25, 2024 and sell it today you would earn a total of  455.00  from holding Garmin or generate 2.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.14%
Values	Daily Returns

Garmin  vs.  DUKE ENERGY CAROLINAS

Garmin

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Garmin are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Garmin is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY CAROLINAS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 26442CAP9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Garmin and 26442CAP9

The main advantage of trading using opposite Garmin and 26442CAP9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garmin position performs unexpectedly, 26442CAP9 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 26442CAP9 will offset losses from the drop in 26442CAP9's long position.

The idea behind Garmin and DUKE ENERGY CAROLINAS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..