Correlation Between Parker Hannifin and CI Financial
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and CI Financial 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 CI Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and CI Financial Corp, you can compare the effects of market volatilities on Parker Hannifin and CI Financial 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 CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and CI Financial.
Diversification Opportunities for Parker Hannifin and CI Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Parker and CIXXF is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp 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 CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and CI Financial go up and down completely randomly.
Pair Corralation between Parker Hannifin and CI Financial
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 2.48 times less return on investment than CI Financial. But when comparing it to its historical volatility, Parker Hannifin is 1.33 times less risky than CI Financial. It trades about 0.12 of its potential returns per unit of risk. CI Financial Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 997.00 in CI Financial Corp on August 28, 2024 and sell it today you would earn a total of 215.00 from holding CI Financial Corp or generate 21.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 8.48% |
| Values | Daily Returns |
Parker Hannifin vs. CI Financial Corp
Performance |
| Timeline |
| Parker Hannifin |
| CI Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Parker Hannifin and CI Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and CI Financial
The main advantage of trading using opposite Parker Hannifin and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, CI Financial 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 CI Financial will offset losses from the drop in CI Financial's long position.| Parker Hannifin vs. Illinois Tool Works | Parker Hannifin vs. Pentair PLC | Parker Hannifin vs. Emerson Electric | Parker Hannifin vs. Smith AO |
| CI Financial vs. Western Digital | CI Financial vs. JD Sports Fashion | CI Financial vs. Saia Inc | CI Financial vs. Casio Computer 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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