Correlation Between Parker Hannifin and Selina Hospitality
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Selina Hospitality 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 Selina Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Selina Hospitality PLC, you can compare the effects of market volatilities on Parker Hannifin and Selina Hospitality 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 Selina Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Selina Hospitality.
Diversification Opportunities for Parker Hannifin and Selina Hospitality
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Parker and Selina is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Selina Hospitality PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selina Hospitality PLC 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 Selina Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selina Hospitality PLC has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Selina Hospitality go up and down completely randomly.
Pair Corralation between Parker Hannifin and Selina Hospitality
If you would invest 63,353 in Parker Hannifin on September 2, 2024 and sell it today you would earn a total of 6,937 from holding Parker Hannifin or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Parker Hannifin vs. Selina Hospitality PLC
Performance |
| Timeline |
| Parker Hannifin |
| Selina Hospitality PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Parker Hannifin and Selina Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and Selina Hospitality
The main advantage of trading using opposite Parker Hannifin and Selina Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Selina Hospitality 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 Selina Hospitality will offset losses from the drop in Selina Hospitality's long position.The idea behind Parker Hannifin and Selina Hospitality PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Selina Hospitality vs. Parker Hannifin | Selina Hospitality vs. National CineMedia | Selina Hospitality vs. Dave Busters Entertainment | Selina Hospitality vs. Mediag3 |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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