Correlation Between Garmin and SUMIBK

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

By analyzing existing cross correlation between Garmin and SUMIBK 293 17 SEP 41, you can compare the effects of market volatilities on Garmin and SUMIBK 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 SUMIBK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garmin and SUMIBK.

Diversification Opportunities for Garmin and SUMIBK

-0.7

Correlation Coefficient

Garmin  SUMIBK

Excellent diversification

The 3 months correlation between Garmin and SUMIBK is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Garmin and SUMIBK 293 17 SEP 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMIBK 293 17 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 SUMIBK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMIBK 293 17 has no effect on the direction of Garmin i.e., Garmin and SUMIBK go up and down completely randomly.

Pair Corralation between Garmin and SUMIBK

Given the investment horizon of 90 days Garmin is expected to generate 3.85 times more return on investment than SUMIBK. However, Garmin is 3.85 times more volatile than SUMIBK 293 17 SEP 41. It trades about 0.14 of its potential returns per unit of risk. SUMIBK 293 17 SEP 41 is currently generating about -0.12 per unit of risk. If you would invest  16,512  in Garmin on October 10, 2024 and sell it today you would earn a total of  4,627  from holding Garmin or generate 28.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	62.9%
Values	Daily Returns

Garmin  vs.  SUMIBK 293 17 SEP 41

Garmin

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Garmin are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Garmin displayed solid returns over the last few months and may actually be approaching a breakup point.

SUMIBK 293 17

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUMIBK 293 17 SEP 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SUMIBK is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Garmin and SUMIBK

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

The idea behind Garmin and SUMIBK 293 17 SEP 41 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.