Correlation Between Fortive Corp and Badger Meter

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

By analyzing existing cross correlation between Fortive Corp and Badger Meter, you can compare the effects of market volatilities on Fortive Corp and Badger Meter 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 Badger Meter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortive Corp and Badger Meter.

Diversification Opportunities for Fortive Corp and Badger Meter

0.7

Correlation Coefficient

Fortive Corp  Badger Meter

Poor diversification

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

Pair Corralation between Fortive Corp and Badger Meter

Considering the 90-day investment horizon Fortive Corp is expected to generate 0.57 times more return on investment than Badger Meter. However, Fortive Corp is 1.75 times less risky than Badger Meter. It trades about -0.08 of its potential returns per unit of risk. Badger Meter is currently generating about -0.11 per unit of risk. If you would invest  5,059  in Fortive Corp on May 6, 2025 and sell it today you would lose (404.00) from holding Fortive Corp or give up 7.99% of portfolio value over 90 days.

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

Fortive Corp  vs.  Badger Meter

Fortive Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fortive Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Badger Meter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Badger Meter has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Fortive Corp and Badger Meter

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

The idea behind Fortive Corp and Badger Meter 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.