Correlation Between PF Industries and Timken
Can any of the company-specific risk be diversified away by investing in both PF Industries and Timken 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 PF Industries and Timken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PF Industries and Timken Company, you can compare the effects of market volatilities on PF Industries and Timken 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 PF Industries with a short position of Timken. Check out your portfolio center. Please also check ongoing floating volatility patterns of PF Industries and Timken.
Diversification Opportunities for PF Industries and Timken
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between PFIN and Timken is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding PF Industries and Timken Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timken Company and PF Industries 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 PF Industries are associated (or correlated) with Timken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timken Company has no effect on the direction of PF Industries i.e., PF Industries and Timken go up and down completely randomly.
Pair Corralation between PF Industries and Timken
If you would invest 716.00 in PF Industries on August 28, 2024 and sell it today you would earn a total of 0.00 from holding PF Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
PF Industries vs. Timken Company
Performance |
| Timeline |
| PF Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Timken Company |
PF Industries and Timken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PF Industries and Timken
The main advantage of trading using opposite PF Industries and Timken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PF Industries position performs unexpectedly, Timken 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 Timken will offset losses from the drop in Timken's long position.| PF Industries vs. Kennametal | PF Industries vs. Hillman Solutions Corp | PF Industries vs. AB SKF | PF Industries vs. Eastern Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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