Correlation Between Fortive Corp and Fitbit

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Can any of the company-specific risk be diversified away by investing in both Fortive Corp and Fitbit 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 Fortive Corp and Fitbit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortive Corp and Fitbit Inc, you can compare the effects of market volatilities on Fortive Corp and Fitbit 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 Fortive Corp with a short position of Fitbit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortive Corp and Fitbit.

Diversification Opportunities for Fortive Corp and Fitbit

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Fortive and Fitbit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fortive Corp and Fitbit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fitbit Inc and Fortive Corp 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 Fortive Corp are associated (or correlated) with Fitbit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fitbit Inc has no effect on the direction of Fortive Corp i.e., Fortive Corp and Fitbit go up and down completely randomly.

Pair Corralation between Fortive Corp and Fitbit

If you would invest  8,366  in Fortive Corp on December 19, 2023 and sell it today you would earn a total of  187.00  from holding Fortive Corp or generate 2.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Fortive Corp  vs.  Fitbit Inc

 Performance 
       Timeline  
Fortive Corp 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Fortive Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Fortive Corp showed solid returns over the last few months and may actually be approaching a breakup point.
Fitbit Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Fitbit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Fitbit is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fortive Corp and Fitbit Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fortive Corp and Fitbit

The main advantage of trading using opposite Fortive Corp and Fitbit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortive Corp position performs unexpectedly, Fitbit 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 Fitbit will offset losses from the drop in Fitbit's long position.
The idea behind Fortive Corp and Fitbit Inc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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