Correlation Between Parker Hannifin and NGK Insulators
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and NGK Insulators 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 NGK Insulators into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and NGK Insulators, you can compare the effects of market volatilities on Parker Hannifin and NGK Insulators 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 NGK Insulators. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and NGK Insulators.
Diversification Opportunities for Parker Hannifin and NGK Insulators
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Parker and NGK is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and NGK Insulators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGK Insulators 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 NGK Insulators. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGK Insulators has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and NGK Insulators go up and down completely randomly.
Pair Corralation between Parker Hannifin and NGK Insulators
If you would invest 63,649 in Parker Hannifin on September 5, 2024 and sell it today you would earn a total of 6,441 from holding Parker Hannifin or generate 10.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Parker Hannifin vs. NGK Insulators
Performance |
| Timeline |
| Parker Hannifin |
| NGK Insulators |
Parker Hannifin and NGK Insulators Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and NGK Insulators
The main advantage of trading using opposite Parker Hannifin and NGK Insulators positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, NGK Insulators 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 NGK Insulators will offset losses from the drop in NGK Insulators' long position.| Parker Hannifin vs. Laser Photonics | Parker Hannifin vs. Siemens AG Class | Parker Hannifin vs. ATVRockN | Parker Hannifin vs. Nuburu Inc |
| NGK Insulators vs. Dear Cashmere Holding | NGK Insulators vs. Goff Corp | NGK Insulators vs. Wialan Technologies | NGK Insulators vs. Cgrowth Capital |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |