Correlation Between Parker Hannifin and Consol Energy
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Consol Energy 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 Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Consol Energy, you can compare the effects of market volatilities on Parker Hannifin and Consol Energy 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 Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Consol Energy.
Diversification Opportunities for Parker Hannifin and Consol Energy
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Parker and Consol is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy 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 Consol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consol Energy has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Consol Energy go up and down completely randomly.
Pair Corralation between Parker Hannifin and Consol Energy
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 0.62 times more return on investment than Consol Energy. However, Parker Hannifin is 1.61 times less risky than Consol Energy. It trades about 0.14 of its potential returns per unit of risk. Consol Energy is currently generating about 0.03 per unit of risk. If you would invest 57,399 in Parker Hannifin on November 2, 2024 and sell it today you would earn a total of 12,990 from holding Parker Hannifin or generate 22.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.29% |
| Values | Daily Returns |
Parker Hannifin vs. Consol Energy
Performance |
| Timeline |
| Parker Hannifin |
| Consol Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Parker Hannifin and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and Consol Energy
The main advantage of trading using opposite Parker Hannifin and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Consol Energy 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 Consol Energy will offset losses from the drop in Consol Energy's long position.| Parker Hannifin vs. Aquagold International | Parker Hannifin vs. Morningstar Unconstrained Allocation | Parker Hannifin vs. Thrivent High Yield | Parker Hannifin vs. High Yield Municipal Fund |
| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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