Correlation Between Getty Images and Pentair PLC
Can any of the company-specific risk be diversified away by investing in both Getty Images and Pentair PLC 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 Getty Images and Pentair PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and Pentair PLC, you can compare the effects of market volatilities on Getty Images and Pentair PLC 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 Getty Images with a short position of Pentair PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Pentair PLC.
Diversification Opportunities for Getty Images and Pentair PLC
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Getty and Pentair is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Pentair PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentair PLC and Getty Images 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 Getty Images Holdings are associated (or correlated) with Pentair PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentair PLC has no effect on the direction of Getty Images i.e., Getty Images and Pentair PLC go up and down completely randomly.
Pair Corralation between Getty Images and Pentair PLC
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Pentair PLC. In addition to that, Getty Images is 2.35 times more volatile than Pentair PLC. It trades about -0.03 of its total potential returns per unit of risk. Pentair PLC is currently generating about 0.15 per unit of volatility. If you would invest 6,030 in Pentair PLC on September 1, 2024 and sell it today you would earn a total of 4,869 from holding Pentair PLC or generate 80.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Images Holdings vs. Pentair PLC
Performance |
| Timeline |
| Getty Images Holdings |
| Pentair PLC |
Getty Images and Pentair PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Pentair PLC
The main advantage of trading using opposite Getty Images and Pentair PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, Pentair PLC 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 Pentair PLC will offset losses from the drop in Pentair PLC's long position.| Getty Images vs. MediaAlpha | Getty Images vs. Asset Entities Class | Getty Images vs. Shutterstock | Getty Images vs. Match Group |
| Pentair PLC vs. Illinois Tool Works | Pentair PLC vs. Parker Hannifin | Pentair PLC vs. Emerson Electric | Pentair PLC 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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