Correlation Between Parker Hannifin and CREF Inflation
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and CREF Inflation 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 CREF Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and CREF Inflation Linked Bond, you can compare the effects of market volatilities on Parker Hannifin and CREF Inflation 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 CREF Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and CREF Inflation.
Diversification Opportunities for Parker Hannifin and CREF Inflation
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Parker and CREF is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and CREF Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREF Inflation Linked 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 CREF Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREF Inflation Linked has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and CREF Inflation go up and down completely randomly.
Pair Corralation between Parker Hannifin and CREF Inflation
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 6.57 times more return on investment than CREF Inflation. However, Parker Hannifin is 6.57 times more volatile than CREF Inflation Linked Bond. It trades about 0.11 of its potential returns per unit of risk. CREF Inflation Linked Bond is currently generating about 0.07 per unit of risk. If you would invest 28,489 in Parker Hannifin on September 14, 2024 and sell it today you would earn a total of 39,768 from holding Parker Hannifin or generate 139.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Parker Hannifin vs. CREF Inflation Linked Bond
Performance |
| Timeline |
| Parker Hannifin |
| CREF Inflation Linked |
Parker Hannifin and CREF Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and CREF Inflation
The main advantage of trading using opposite Parker Hannifin and CREF Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, CREF Inflation 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 CREF Inflation will offset losses from the drop in CREF Inflation's long position.| Parker Hannifin vs. Hurco Companies | Parker Hannifin vs. Enerpac Tool Group | Parker Hannifin vs. China Yuchai International | Parker Hannifin vs. Luxfer Holdings PLC |
| CREF Inflation vs. Park Ohio Holdings | CREF Inflation vs. Parker Hannifin | CREF Inflation vs. MGIC Investment Corp | CREF Inflation vs. Western Asset Investment |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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