Correlation Between Crane and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both Crane 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 Crane and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Parker Hannifin, you can compare the effects of market volatilities on Crane 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 Crane with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Parker Hannifin.
Diversification Opportunities for Crane and Parker Hannifin
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Crane and Parker is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and Crane 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 Crane Company 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 Crane i.e., Crane and Parker Hannifin go up and down completely randomly.
Pair Corralation between Crane and Parker Hannifin
Allowing for the 90-day total investment horizon Crane Company is expected to generate 1.49 times more return on investment than Parker Hannifin. However, Crane is 1.49 times more volatile than Parker Hannifin. It trades about 0.14 of its potential returns per unit of risk. Parker Hannifin is currently generating about 0.17 per unit of risk. If you would invest 15,588 in Crane Company on October 25, 2024 and sell it today you would earn a total of 599.00 from holding Crane Company or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Crane Company vs. Parker Hannifin
Performance |
| Timeline |
| Crane Company |
| Parker Hannifin |
Crane and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Parker Hannifin
The main advantage of trading using opposite Crane and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane 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.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |