Correlation Between Pentair PLC and Southern California
Can any of the company-specific risk be diversified away by investing in both Pentair PLC and Southern California 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 Pentair PLC and Southern California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pentair PLC and Southern California Gas, you can compare the effects of market volatilities on Pentair PLC and Southern California 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 Pentair PLC with a short position of Southern California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentair PLC and Southern California.
Diversification Opportunities for Pentair PLC and Southern California
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pentair and Southern is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pentair PLC and Southern California Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern California Gas and Pentair PLC 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 Pentair PLC are associated (or correlated) with Southern California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern California Gas has no effect on the direction of Pentair PLC i.e., Pentair PLC and Southern California go up and down completely randomly.
Pair Corralation between Pentair PLC and Southern California
If you would invest 10,563 in Pentair PLC on September 12, 2024 and sell it today you would earn a total of 224.00 from holding Pentair PLC or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pentair PLC vs. Southern California Gas
Performance |
| Timeline |
| Pentair PLC |
| Southern California Gas |
Pentair PLC and Southern California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pentair PLC and Southern California
The main advantage of trading using opposite Pentair PLC and Southern California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentair PLC position performs unexpectedly, Southern California 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 Southern California will offset losses from the drop in Southern California's long position.| Pentair PLC vs. Illinois Tool Works | Pentair PLC vs. Parker Hannifin | Pentair PLC vs. Emerson Electric | Pentair PLC vs. Smith AO |
| Southern California vs. Skechers USA | Southern California vs. Weibo Corp | Southern California vs. RBC Bearings Incorporated | Southern California vs. LENSAR Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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