Correlation Between Pentair Plc and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both Pentair Plc and Jefferies Financial 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 Pentair Plc and Jefferies Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pentair plc and Jefferies Financial Group, you can compare the effects of market volatilities on Pentair Plc and Jefferies Financial 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 Pentair Plc with a short position of Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentair Plc and Jefferies Financial.
Diversification Opportunities for Pentair Plc and Jefferies Financial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pentair and Jefferies is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Pentair plc and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial and Pentair Plc 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 Pentair plc are associated (or correlated) with Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Pentair Plc i.e., Pentair Plc and Jefferies Financial go up and down completely randomly.
Pair Corralation between Pentair Plc and Jefferies Financial
Assuming the 90 days trading horizon Pentair plc is expected to under-perform the Jefferies Financial. But the stock apears to be less risky and, when comparing its historical volatility, Pentair plc is 1.58 times less risky than Jefferies Financial. The stock trades about -0.28 of its potential returns per unit of risk. The Jefferies Financial Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 48,081 in Jefferies Financial Group on October 12, 2024 and sell it today you would lose (123.00) from holding Jefferies Financial Group or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Pentair plc vs. Jefferies Financial Group
Performance |
| Timeline |
| Pentair plc |
| Jefferies Financial |
Pentair Plc and Jefferies Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pentair Plc and Jefferies Financial
The main advantage of trading using opposite Pentair Plc and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentair Plc position performs unexpectedly, Jefferies Financial 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.| Pentair Plc vs. Verizon Communications | Pentair Plc vs. Marfrig Global Foods | Pentair Plc vs. Chunghwa Telecom Co, | Pentair Plc vs. Zoom Video Communications |
| Jefferies Financial vs. Pentair plc | Jefferies Financial vs. Tres Tentos Agroindustrial | Jefferies Financial vs. Metalurgica Gerdau SA | Jefferies Financial vs. Brpr Corporate Offices |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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