Correlation Between CVD Equipment and Park Ohio
Can any of the company-specific risk be diversified away by investing in both CVD Equipment and Park Ohio 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 CVD Equipment and Park Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVD Equipment and Park Ohio Holdings, you can compare the effects of market volatilities on CVD Equipment and Park Ohio 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 CVD Equipment with a short position of Park Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVD Equipment and Park Ohio.
Diversification Opportunities for CVD Equipment and Park Ohio
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVD and Park is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CVD Equipment and Park Ohio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Ohio Holdings and CVD Equipment 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 CVD Equipment are associated (or correlated) with Park Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Ohio Holdings has no effect on the direction of CVD Equipment i.e., CVD Equipment and Park Ohio go up and down completely randomly.
Pair Corralation between CVD Equipment and Park Ohio
Considering the 90-day investment horizon CVD Equipment is expected to under-perform the Park Ohio. In addition to that, CVD Equipment is 1.21 times more volatile than Park Ohio Holdings. It trades about -0.01 of its total potential returns per unit of risk. Park Ohio Holdings is currently generating about 0.13 per unit of volatility. If you would invest 2,933 in Park Ohio Holdings on August 23, 2024 and sell it today you would earn a total of 290.00 from holding Park Ohio Holdings or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVD Equipment vs. Park Ohio Holdings
Performance |
| Timeline |
| CVD Equipment |
| Park Ohio Holdings |
CVD Equipment and Park Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVD Equipment and Park Ohio
The main advantage of trading using opposite CVD Equipment and Park Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVD Equipment position performs unexpectedly, Park Ohio 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 Park Ohio will offset losses from the drop in Park Ohio's long position.| CVD Equipment vs. Standex International | CVD Equipment vs. Intevac | CVD Equipment vs. Thermon Group Holdings | CVD Equipment vs. Enpro Industries |
| Park Ohio vs. Hurco Companies | Park Ohio vs. Enerpac Tool Group | Park Ohio vs. China Yuchai International | Park Ohio vs. Luxfer Holdings PLC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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