Correlation Between Parker Hannifin and CEZ A
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and CEZ A 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 CEZ A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and CEZ A S, you can compare the effects of market volatilities on Parker Hannifin and CEZ A 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 CEZ A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and CEZ A.
Diversification Opportunities for Parker Hannifin and CEZ A
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Parker and CEZ is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and CEZ A S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEZ A S 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 CEZ A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEZ A S has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and CEZ A go up and down completely randomly.
Pair Corralation between Parker Hannifin and CEZ A
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 1.09 times more return on investment than CEZ A. However, Parker Hannifin is 1.09 times more volatile than CEZ A S. It trades about 0.11 of its potential returns per unit of risk. CEZ A S is currently generating about 0.03 per unit of risk. If you would invest 30,140 in Parker Hannifin on August 31, 2024 and sell it today you would earn a total of 40,150 from holding Parker Hannifin or generate 133.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.2% |
| Values | Daily Returns |
Parker Hannifin vs. CEZ A S
Performance |
| Timeline |
| Parker Hannifin |
| CEZ A S |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Parker Hannifin and CEZ A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and CEZ A
The main advantage of trading using opposite Parker Hannifin and CEZ A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, CEZ A 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 CEZ A will offset losses from the drop in CEZ A's long position.| Parker Hannifin vs. Standex International | Parker Hannifin vs. Donaldson | Parker Hannifin vs. CSW Industrials | Parker Hannifin vs. Franklin Electric Co |
| CEZ A vs. GMS Inc | CEZ A vs. Griffon | CEZ A vs. Flexible Solutions International | CEZ A 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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