Correlation Between Mativ Holdings and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings 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 Mativ Holdings and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Parker Hannifin, you can compare the effects of market volatilities on Mativ Holdings 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 Mativ Holdings with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Parker Hannifin.
Diversification Opportunities for Mativ Holdings and Parker Hannifin
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mativ and Parker is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and Mativ Holdings 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 Mativ Holdings 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 Mativ Holdings i.e., Mativ Holdings and Parker Hannifin go up and down completely randomly.
Pair Corralation between Mativ Holdings and Parker Hannifin
Given the investment horizon of 90 days Mativ Holdings is expected to generate 3.26 times more return on investment than Parker Hannifin. However, Mativ Holdings is 3.26 times more volatile than Parker Hannifin. It trades about -0.04 of its potential returns per unit of risk. Parker Hannifin is currently generating about -0.2 per unit of risk. If you would invest 1,221 in Mativ Holdings on September 14, 2024 and sell it today you would lose (35.00) from holding Mativ Holdings or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. Parker Hannifin
Performance |
| Timeline |
| Mativ Holdings |
| Parker Hannifin |
Mativ Holdings and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Parker Hannifin
The main advantage of trading using opposite Mativ Holdings and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings 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.| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel Corp |
| Parker Hannifin vs. Hurco Companies | Parker Hannifin vs. Enerpac Tool Group | Parker Hannifin vs. China Yuchai International | Parker Hannifin 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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