Correlation Between CDN IMPERIAL and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL 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 CDN IMPERIAL and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDN IMPERIAL BANK and Parker Hannifin, you can compare the effects of market volatilities on CDN IMPERIAL 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 CDN IMPERIAL with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Parker Hannifin.
Diversification Opportunities for CDN IMPERIAL and Parker Hannifin
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CDN and Parker is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and CDN IMPERIAL 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 CDN IMPERIAL BANK 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 CDN IMPERIAL i.e., CDN IMPERIAL and Parker Hannifin go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Parker Hannifin
Assuming the 90 days trading horizon CDN IMPERIAL BANK is expected to generate 0.39 times more return on investment than Parker Hannifin. However, CDN IMPERIAL BANK is 2.56 times less risky than Parker Hannifin. It trades about 0.32 of its potential returns per unit of risk. Parker Hannifin is currently generating about 0.1 per unit of risk. If you would invest 5,572 in CDN IMPERIAL BANK on September 13, 2024 and sell it today you would earn a total of 821.00 from holding CDN IMPERIAL BANK or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. Parker Hannifin
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| Parker Hannifin |
CDN IMPERIAL and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Parker Hannifin
The main advantage of trading using opposite CDN IMPERIAL and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL 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.| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc |
| Parker Hannifin vs. CDN IMPERIAL BANK | Parker Hannifin vs. International Game Technology | Parker Hannifin vs. BANKINTER ADR 2007 | Parker Hannifin vs. PT Bank Maybank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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