Correlation Between Garmin and Software Acquisition

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

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

Diversification Opportunities for Garmin and Software Acquisition

0.69

Correlation Coefficient

Garmin  Software Acquisition

Poor diversification

The 3 months correlation between Garmin and Software is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Garmin and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition and Garmin 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 Garmin are associated (or correlated) with Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of Garmin i.e., Garmin and Software Acquisition go up and down completely randomly.

Pair Corralation between Garmin and Software Acquisition

Given the investment horizon of 90 days Garmin is expected to generate 30.27 times less return on investment than Software Acquisition. But when comparing it to its historical volatility, Garmin is 17.9 times less risky than Software Acquisition. It trades about 0.19 of its potential returns per unit of risk. Software Acquisition Group is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  1.20  in Software Acquisition Group on July 8, 2025 and sell it today you would earn a total of  8.75  from holding Software Acquisition Group or generate 729.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	57.81%
Values	Daily Returns

Garmin  vs.  Software Acquisition Group

Garmin

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Garmin are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Garmin displayed solid returns over the last few months and may actually be approaching a breakup point.

Software Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Software Acquisition Group are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Software Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Garmin and Software Acquisition

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

The idea behind Garmin and Software Acquisition Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.