Correlation Between Parker Hannifin and Nordex SE
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Nordex SE 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 Nordex SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Nordex SE, you can compare the effects of market volatilities on Parker Hannifin and Nordex SE 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 Nordex SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Nordex SE.
Diversification Opportunities for Parker Hannifin and Nordex SE
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Parker and Nordex is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Nordex SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordex SE 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 Nordex SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordex SE has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Nordex SE go up and down completely randomly.
Pair Corralation between Parker Hannifin and Nordex SE
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 0.67 times more return on investment than Nordex SE. However, Parker Hannifin is 1.48 times less risky than Nordex SE. It trades about 0.13 of its potential returns per unit of risk. Nordex SE is currently generating about 0.02 per unit of risk. If you would invest 42,340 in Parker Hannifin on August 25, 2024 and sell it today you would earn a total of 28,347 from holding Parker Hannifin or generate 66.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parker Hannifin vs. Nordex SE
Performance |
| Timeline |
| Parker Hannifin |
| Nordex SE |
Parker Hannifin and Nordex SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and Nordex SE
The main advantage of trading using opposite Parker Hannifin and Nordex SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Nordex SE 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 Nordex SE will offset losses from the drop in Nordex SE's long position.| Parker Hannifin vs. Aquagold International | Parker Hannifin vs. Morningstar Unconstrained Allocation | Parker Hannifin vs. High Yield Municipal Fund | Parker Hannifin vs. Thrivent High Yield |
| Nordex SE vs. Aumann AG | Nordex SE vs. Arista Power | Nordex SE vs. Atlas Copco AB | Nordex SE vs. American Commerce Solutions |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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