Correlation Between Parker Hannifin and AMEREN
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By analyzing existing cross correlation between Parker Hannifin and AMEREN ILL 37, you can compare the effects of market volatilities on Parker Hannifin and AMEREN 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 AMEREN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and AMEREN.
Diversification Opportunities for Parker Hannifin and AMEREN
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Parker and AMEREN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and AMEREN ILL 37 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMEREN ILL 37 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 AMEREN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMEREN ILL 37 has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and AMEREN go up and down completely randomly.
Pair Corralation between Parker Hannifin and AMEREN
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 1.73 times more return on investment than AMEREN. However, Parker Hannifin is 1.73 times more volatile than AMEREN ILL 37. It trades about 0.24 of its potential returns per unit of risk. AMEREN ILL 37 is currently generating about 0.17 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Parker Hannifin vs. AMEREN ILL 37
Performance |
| Timeline |
| Parker Hannifin |
| AMEREN ILL 37 |
Parker Hannifin and AMEREN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and AMEREN
The main advantage of trading using opposite Parker Hannifin and AMEREN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, AMEREN 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 AMEREN will offset losses from the drop in AMEREN's long position.The idea behind Parker Hannifin and AMEREN ILL 37 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.| AMEREN vs. AEP TEX INC | AMEREN vs. US BANK NATIONAL | AMEREN vs. International Business Machines | AMEREN vs. Intel |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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