Correlation Between Park Ohio and Gorman Rupp
Can any of the company-specific risk be diversified away by investing in both Park Ohio and Gorman Rupp 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 Park Ohio and Gorman Rupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Ohio Holdings and Gorman Rupp, you can compare the effects of market volatilities on Park Ohio and Gorman Rupp 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 Park Ohio with a short position of Gorman Rupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ohio and Gorman Rupp.
Diversification Opportunities for Park Ohio and Gorman Rupp
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Park and Gorman is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio Holdings and Gorman Rupp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gorman Rupp and Park Ohio 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 Park Ohio Holdings are associated (or correlated) with Gorman Rupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gorman Rupp has no effect on the direction of Park Ohio i.e., Park Ohio and Gorman Rupp go up and down completely randomly.
Pair Corralation between Park Ohio and Gorman Rupp
Given the investment horizon of 90 days Park Ohio Holdings is expected to generate 1.62 times more return on investment than Gorman Rupp. However, Park Ohio is 1.62 times more volatile than Gorman Rupp. It trades about 0.18 of its potential returns per unit of risk. Gorman Rupp is currently generating about 0.27 per unit of risk. If you would invest 2,838 in Park Ohio Holdings on September 3, 2024 and sell it today you would earn a total of 379.00 from holding Park Ohio Holdings or generate 13.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Ohio Holdings vs. Gorman Rupp
Performance |
| Timeline |
| Park Ohio Holdings |
| Gorman Rupp |
Park Ohio and Gorman Rupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Ohio and Gorman Rupp
The main advantage of trading using opposite Park Ohio and Gorman Rupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Ohio position performs unexpectedly, Gorman Rupp 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 Gorman Rupp will offset losses from the drop in Gorman Rupp's long position.| Park Ohio vs. Hurco Companies | Park Ohio vs. Enerpac Tool Group | Park Ohio vs. China Yuchai International | Park Ohio vs. Luxfer Holdings PLC |
| Gorman Rupp vs. Standex International | Gorman Rupp vs. Franklin Electric Co | Gorman Rupp vs. Omega Flex | Gorman Rupp vs. China Yuchai International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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