Correlation Between EPSILON HEALTHCARE and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and Parker Hannifin 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 EPSILON HEALTHCARE and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPSILON HEALTHCARE LTD and Parker Hannifin, you can compare the effects of market volatilities on EPSILON HEALTHCARE and Parker Hannifin 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 EPSILON HEALTHCARE with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and Parker Hannifin.
Diversification Opportunities for EPSILON HEALTHCARE and Parker Hannifin
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and Parker is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and EPSILON HEALTHCARE 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 EPSILON HEALTHCARE LTD are associated (or correlated) with Parker Hannifin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parker Hannifin has no effect on the direction of EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and Parker Hannifin go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and Parker Hannifin
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to under-perform the Parker Hannifin. But the stock apears to be less risky and, when comparing its historical volatility, EPSILON HEALTHCARE LTD is 1.48 times less risky than Parker Hannifin. The stock trades about -0.03 of its potential returns per unit of risk. The Parker Hannifin is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 40,127 in Parker Hannifin on September 4, 2024 and sell it today you would earn a total of 26,673 from holding Parker Hannifin or generate 66.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
EPSILON HEALTHCARE LTD vs. Parker Hannifin
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| Parker Hannifin |
EPSILON HEALTHCARE and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and Parker Hannifin
The main advantage of trading using opposite EPSILON HEALTHCARE and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE position performs unexpectedly, Parker Hannifin 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 Parker Hannifin will offset losses from the drop in Parker Hannifin's long position.| EPSILON HEALTHCARE vs. Takeda Pharmaceutical | EPSILON HEALTHCARE vs. Elanco Animal Health | EPSILON HEALTHCARE vs. Superior Plus Corp | EPSILON HEALTHCARE vs. Origin Agritech |
| Parker Hannifin vs. Compagnie Plastic Omnium | Parker Hannifin vs. Virtus Investment Partners | Parker Hannifin vs. Genco Shipping Trading | Parker Hannifin vs. New Residential 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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