Correlation Between Grupo Aeroportuario and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario 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 Grupo Aeroportuario and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aeroportuario del and Parker Hannifin, you can compare the effects of market volatilities on Grupo Aeroportuario 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 Grupo Aeroportuario with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and Parker Hannifin.
Diversification Opportunities for Grupo Aeroportuario and Parker Hannifin
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Parker is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and Grupo Aeroportuario 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 Grupo Aeroportuario del 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 Grupo Aeroportuario i.e., Grupo Aeroportuario and Parker Hannifin go up and down completely randomly.
Pair Corralation between Grupo Aeroportuario and Parker Hannifin
Considering the 90-day investment horizon Grupo Aeroportuario del is expected to under-perform the Parker Hannifin. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Aeroportuario del is 1.12 times less risky than Parker Hannifin. The stock trades about -0.1 of its potential returns per unit of risk. The Parker Hannifin is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 52,052 in Parker Hannifin on September 3, 2024 and sell it today you would earn a total of 18,017 from holding Parker Hannifin or generate 34.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aeroportuario del vs. Parker Hannifin
Performance |
| Timeline |
| Grupo Aeroportuario del |
| Parker Hannifin |
Grupo Aeroportuario and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aeroportuario and Parker Hannifin
The main advantage of trading using opposite Grupo Aeroportuario and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario 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.| Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Corporacion America Airports | Grupo Aeroportuario vs. AerSale Corp | Grupo Aeroportuario vs. Flughafen Zrich AG |
| Parker Hannifin vs. Illinois Tool Works | Parker Hannifin vs. Pentair PLC | Parker Hannifin vs. Emerson Electric | Parker Hannifin vs. Smith AO |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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