Correlation Between Textron and Trimble

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

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

Diversification Opportunities for Textron and Trimble

-0.36

Correlation Coefficient

Textron  Trimble

Very good diversification

The 3 months correlation between Textron and Trimble is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Textron and Trimble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimble and Textron 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 Textron are associated (or correlated) with Trimble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimble has no effect on the direction of Textron i.e., Textron and Trimble go up and down completely randomly.

Pair Corralation between Textron and Trimble

Considering the 90-day investment horizon Textron is expected to generate 1.01 times more return on investment than Trimble. However, Textron is 1.01 times more volatile than Trimble. It trades about -0.02 of its potential returns per unit of risk. Trimble is currently generating about -0.04 per unit of risk. If you would invest  8,412  in Textron on July 16, 2025 and sell it today you would lose (238.00) from holding Textron or give up 2.83% of portfolio value over 90 days.

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

Textron  vs.  Trimble

Textron

Risk-Adjusted Performance

Weakest

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

Trimble

Risk-Adjusted Performance

Weakest

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

Pair Trading with Textron and Trimble

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

The idea behind Textron and Trimble 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.