Correlation Between Palfinger and Archrock
Can any of the company-specific risk be diversified away by investing in both Palfinger and Archrock 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 Palfinger and Archrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palfinger AG and Archrock, you can compare the effects of market volatilities on Palfinger and Archrock 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 Palfinger with a short position of Archrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palfinger and Archrock.
Diversification Opportunities for Palfinger and Archrock
Very good diversification
The 3 months correlation between Palfinger and Archrock is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Palfinger AG and Archrock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archrock and Palfinger 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 Palfinger AG are associated (or correlated) with Archrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archrock has no effect on the direction of Palfinger i.e., Palfinger and Archrock go up and down completely randomly.
Pair Corralation between Palfinger and Archrock
Assuming the 90 days horizon Palfinger AG is expected to under-perform the Archrock. But the pink sheet apears to be less risky and, when comparing its historical volatility, Palfinger AG is 1.41 times less risky than Archrock. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Archrock is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,002 in Archrock on September 4, 2024 and sell it today you would earn a total of 537.00 from holding Archrock or generate 26.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palfinger AG vs. Archrock
Performance |
| Timeline |
| Palfinger AG |
| Archrock |
Palfinger and Archrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palfinger and Archrock
The main advantage of trading using opposite Palfinger and Archrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palfinger position performs unexpectedly, Archrock 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 Archrock will offset losses from the drop in Archrock's long position.| Palfinger vs. Volvo AB ADR | Palfinger vs. Deere Company | Palfinger vs. Deutsche Post AG | Palfinger vs. VINCI SA |
| Archrock vs. ProPetro Holding Corp | Archrock vs. Select Energy Services | Archrock vs. USA Compression Partners | Archrock vs. Par Pacific Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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