Correlation Between Park Ohio and Rockwell Automation
Can any of the company-specific risk be diversified away by investing in both Park Ohio and Rockwell Automation 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 Rockwell Automation 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 Rockwell Automation, you can compare the effects of market volatilities on Park Ohio and Rockwell Automation 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 Rockwell Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ohio and Rockwell Automation.
Diversification Opportunities for Park Ohio and Rockwell Automation
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Park and Rockwell is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio Holdings and Rockwell Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockwell Automation 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 Rockwell Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockwell Automation has no effect on the direction of Park Ohio i.e., Park Ohio and Rockwell Automation go up and down completely randomly.
Pair Corralation between Park Ohio and Rockwell Automation
Given the investment horizon of 90 days Park Ohio Holdings is expected to generate 1.29 times more return on investment than Rockwell Automation. However, Park Ohio is 1.29 times more volatile than Rockwell Automation. It trades about 0.18 of its potential returns per unit of risk. Rockwell Automation is currently generating about 0.21 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Ohio Holdings vs. Rockwell Automation
Performance |
| Timeline |
| Park Ohio Holdings |
| Rockwell Automation |
Park Ohio and Rockwell Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Ohio and Rockwell Automation
The main advantage of trading using opposite Park Ohio and Rockwell Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Ohio position performs unexpectedly, Rockwell Automation 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 Rockwell Automation will offset losses from the drop in Rockwell Automation'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 |
| Rockwell Automation vs. Dover | Rockwell Automation vs. Illinois Tool Works | Rockwell Automation vs. Ingersoll Rand | Rockwell Automation vs. Eaton PLC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |