Correlation Between CDW Corp and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both CDW Corp 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 CDW Corp and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and Parker Hannifin, you can compare the effects of market volatilities on CDW Corp 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 CDW Corp with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and Parker Hannifin.
Diversification Opportunities for CDW Corp and Parker Hannifin
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CDW and Parker is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and CDW 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 CDW Corp 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 CDW Corp i.e., CDW Corp and Parker Hannifin go up and down completely randomly.
Pair Corralation between CDW Corp and Parker Hannifin
Considering the 90-day investment horizon CDW Corp is expected to under-perform the Parker Hannifin. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 1.16 times less risky than Parker Hannifin. The stock trades about -0.19 of its potential returns per unit of risk. The Parker Hannifin is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 63,649 in Parker Hannifin on September 3, 2024 and sell it today you would earn a total of 6,641 from holding Parker Hannifin or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. Parker Hannifin
Performance |
| Timeline |
| CDW Corp |
| Parker Hannifin |
CDW Corp and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and Parker Hannifin
The main advantage of trading using opposite CDW Corp and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp 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.| CDW Corp vs. CACI International | CDW Corp vs. Jack Henry Associates | CDW Corp vs. Broadridge Financial Solutions | CDW Corp vs. ExlService Holdings |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |