Correlation Between Parker Hannifin and Aida Engineering
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Aida Engineering 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 Parker Hannifin and Aida Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Aida Engineering Ltd, you can compare the effects of market volatilities on Parker Hannifin and Aida Engineering 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 Parker Hannifin with a short position of Aida Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Aida Engineering.
Diversification Opportunities for Parker Hannifin and Aida Engineering
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Parker and Aida is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Aida Engineering Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aida Engineering and Parker Hannifin 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 Parker Hannifin are associated (or correlated) with Aida Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aida Engineering has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Aida Engineering go up and down completely randomly.
Pair Corralation between Parker Hannifin and Aida Engineering
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 1.81 times more return on investment than Aida Engineering. However, Parker Hannifin is 1.81 times more volatile than Aida Engineering Ltd. It trades about 0.28 of its potential returns per unit of risk. Aida Engineering Ltd is currently generating about -0.24 per unit of risk. If you would invest 62,218 in Parker Hannifin on August 29, 2024 and sell it today you would earn a total of 8,467 from holding Parker Hannifin or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parker Hannifin vs. Aida Engineering Ltd
Performance |
| Timeline |
| Parker Hannifin |
| Aida Engineering |
Parker Hannifin and Aida Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and Aida Engineering
The main advantage of trading using opposite Parker Hannifin and Aida Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Aida Engineering 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 Aida Engineering will offset losses from the drop in Aida Engineering's long position.| Parker Hannifin vs. Aquagold International | Parker Hannifin vs. Morningstar Unconstrained Allocation | Parker Hannifin vs. High Yield Municipal Fund | Parker Hannifin vs. Thrivent High Yield |
| Aida Engineering vs. Luxfer Holdings PLC | Aida Engineering vs. Graham | Aida Engineering vs. Enerpac Tool Group | Aida Engineering vs. Kadant Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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