Correlation Between 26442UAB0 and Garmin

Can any of the company-specific risk be diversified away by investing in both 26442UAB0 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 26442UAB0 and Garmin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY PROGRESS and Garmin, you can compare the effects of market volatilities on 26442UAB0 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 26442UAB0 with a short position of Garmin. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442UAB0 and Garmin.

Diversification Opportunities for 26442UAB0 and Garmin

-0.23

Correlation Coefficient

26442UAB0  Garmin

Very good diversification

The 3 months correlation between 26442UAB0 and Garmin is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY PROGRESS and Garmin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garmin and 26442UAB0 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 DUKE ENERGY PROGRESS 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 26442UAB0 i.e., 26442UAB0 and Garmin go up and down completely randomly.

Pair Corralation between 26442UAB0 and Garmin

Assuming the 90 days trading horizon 26442UAB0 is expected to generate 3.49 times less return on investment than Garmin. But when comparing it to its historical volatility, DUKE ENERGY PROGRESS is 2.73 times less risky than Garmin. It trades about 0.03 of its potential returns per unit of risk. Garmin is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  20,992  in Garmin on December 25, 2024 and sell it today you would earn a total of  865.00  from holding Garmin or generate 4.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.0%
Values	Daily Returns

DUKE ENERGY PROGRESS  vs.  Garmin

DUKE ENERGY PROGRESS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY PROGRESS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 26442UAB0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Garmin

Risk-Adjusted Performance

Weak

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 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.

Pair Trading with 26442UAB0 and Garmin

The main advantage of trading using opposite 26442UAB0 and Garmin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442UAB0 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 DUKE ENERGY PROGRESS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..