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
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Parker and Atlas is 0.29. 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 generate 0.64 times more return on investment than Atlas Copco. However, Parker Hannifin is 1.57 times less risky than Atlas Copco. It trades about 0.14 of its potential returns per unit of risk. Atlas Copco AB is currently generating about 0.06 per unit of risk. If you would invest 40,027 in Parker Hannifin on September 1, 2024 and sell it today you would earn a total of 30,263 from holding Parker Hannifin or generate 75.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| 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. Flowserve | Parker Hannifin vs. Dover | Parker Hannifin vs. Crane Company | Parker Hannifin vs. Graco Inc |
| Atlas Copco vs. GE Aerospace | Atlas Copco vs. Eaton PLC | Atlas Copco vs. Siemens AG Class | Atlas Copco vs. Parker Hannifin |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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