Correlation Between Parker Hannifin and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Atlas Copco 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 Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Atlas Copco AB, you can compare the effects of market volatilities on Parker Hannifin and Atlas Copco 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 Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Atlas Copco.
Diversification Opportunities for Parker Hannifin and Atlas Copco
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Parker and Atlas is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Atlas Copco AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Copco AB 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 Atlas Copco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Copco AB has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Atlas Copco go up and down completely randomly.
Pair Corralation between Parker Hannifin and Atlas Copco
Allowing for the 90-day total investment horizon Parker Hannifin is expected to under-perform the Atlas Copco. In addition to that, Parker Hannifin is 2.03 times more volatile than Atlas Copco AB. It trades about 0.0 of its total potential returns per unit of risk. Atlas Copco AB is currently generating about 0.22 per unit of volatility. If you would invest 1,485 in Atlas Copco AB on November 27, 2024 and sell it today you would earn a total of 60.00 from holding Atlas Copco AB or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parker Hannifin vs. Atlas Copco AB
Performance |
| Timeline |
| Parker Hannifin |
| Atlas Copco AB |
Parker Hannifin and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and Atlas Copco
The main advantage of trading using opposite Parker Hannifin and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Atlas Copco 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 Atlas Copco will offset losses from the drop in Atlas Copco's long position.| Parker Hannifin vs. Illinois Tool Works | Parker Hannifin vs. Pentair PLC | Parker Hannifin vs. Emerson Electric | Parker Hannifin vs. Smith AO |
| Atlas Copco vs. Amaero International | Atlas Copco vs. Arista Power | Atlas Copco vs. Alfa Laval AB | Atlas Copco vs. American Commerce Solutions |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Directory Find actively traded commodities issued by global exchanges |