Correlation Between PAR Technology and HP
Can any of the company-specific risk be diversified away by investing in both PAR Technology and HP 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 PAR Technology and HP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAR Technology and HP Inc, you can compare the effects of market volatilities on PAR Technology and HP 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 PAR Technology with a short position of HP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAR Technology and HP.
Diversification Opportunities for PAR Technology and HP
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PAR and HP is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PAR Technology and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP Inc and PAR Technology 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 PAR Technology are associated (or correlated) with HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of PAR Technology i.e., PAR Technology and HP go up and down completely randomly.
Pair Corralation between PAR Technology and HP
Considering the 90-day investment horizon PAR Technology is expected to generate 1.97 times more return on investment than HP. However, PAR Technology is 1.97 times more volatile than HP Inc. It trades about 0.39 of its potential returns per unit of risk. HP Inc is currently generating about 0.13 per unit of risk. If you would invest 5,972 in PAR Technology on August 25, 2024 and sell it today you would earn a total of 1,769 from holding PAR Technology or generate 29.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PAR Technology vs. HP Inc
Performance |
| Timeline |
| PAR Technology |
| HP Inc |
PAR Technology and HP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAR Technology and HP
The main advantage of trading using opposite PAR Technology and HP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAR Technology position performs unexpectedly, HP 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 HP will offset losses from the drop in HP's long position.| PAR Technology vs. Plexus Corp | PAR Technology vs. Benchmark Electronics | PAR Technology vs. Jabil Circuit | PAR Technology vs. Sanmina |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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