Correlation Between Teledyne Technologies and Garmin

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

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

Diversification Opportunities for Teledyne Technologies and Garmin

0.5

Correlation Coefficient

Teledyne Technologies  Garmin

Very weak diversification

The 3 months correlation between Teledyne and Garmin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Teledyne Technologies Incorpor and Garmin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garmin and Teledyne Technologies 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 Teledyne Technologies Incorporated are associated (or correlated) with Garmin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garmin has no effect on the direction of Teledyne Technologies i.e., Teledyne Technologies and Garmin go up and down completely randomly.

Pair Corralation between Teledyne Technologies and Garmin

Considering the 90-day investment horizon Teledyne Technologies Incorporated is expected to generate 0.67 times more return on investment than Garmin. However, Teledyne Technologies Incorporated is 1.5 times less risky than Garmin. It trades about 0.08 of its potential returns per unit of risk. Garmin is currently generating about 0.05 per unit of risk. If you would invest  46,523  in Teledyne Technologies Incorporated on December 29, 2024 and sell it today you would earn a total of  3,029  from holding Teledyne Technologies Incorporated or generate 6.51% return on investment over 90 days.

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

Teledyne Technologies Incorpor  vs.  Garmin

Teledyne Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Teledyne Technologies Incorporated are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Teledyne Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Garmin

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Garmin are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Garmin may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Teledyne Technologies and Garmin

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

The idea behind Teledyne Technologies Incorporated and Garmin 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.