Correlation Between Dennys Corp and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both Dennys 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 Dennys 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 Dennys Corp and Parker Hannifin, you can compare the effects of market volatilities on Dennys 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 Dennys Corp with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and Parker Hannifin.
Diversification Opportunities for Dennys Corp and Parker Hannifin
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dennys and Parker is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and Dennys 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 Dennys 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 Dennys Corp i.e., Dennys Corp and Parker Hannifin go up and down completely randomly.
Pair Corralation between Dennys Corp and Parker Hannifin
Given the investment horizon of 90 days Dennys Corp is expected to under-perform the Parker Hannifin. In addition to that, Dennys Corp is 1.64 times more volatile than Parker Hannifin. It trades about -0.05 of its total potential returns per unit of risk. Parker Hannifin is currently generating about 0.1 per unit of volatility. If you would invest 39,552 in Parker Hannifin on September 12, 2024 and sell it today you would earn a total of 28,241 from holding Parker Hannifin or generate 71.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dennys Corp vs. Parker Hannifin
Performance |
| Timeline |
| Dennys Corp |
| Parker Hannifin |
Dennys Corp and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dennys Corp and Parker Hannifin
The main advantage of trading using opposite Dennys Corp and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys 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.| Dennys Corp vs. Noble Romans | Dennys Corp vs. Good Times Restaurants | Dennys Corp vs. Flanigans Enterprises | Dennys Corp vs. FAT Brands |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |