Correlation Between Pentair Plc and AEON STORES
Can any of the company-specific risk be diversified away by investing in both Pentair Plc and AEON STORES 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 AEON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pentair plc and AEON STORES, you can compare the effects of market volatilities on Pentair Plc and AEON STORES 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 AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentair Plc and AEON STORES.
Diversification Opportunities for Pentair Plc and AEON STORES
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pentair and AEON is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pentair plc and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES 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 AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of Pentair Plc i.e., Pentair Plc and AEON STORES go up and down completely randomly.
Pair Corralation between Pentair Plc and AEON STORES
Assuming the 90 days horizon Pentair plc is expected to generate 0.57 times more return on investment than AEON STORES. However, Pentair plc is 1.76 times less risky than AEON STORES. It trades about 0.1 of its potential returns per unit of risk. AEON STORES is currently generating about -0.01 per unit of risk. If you would invest 4,398 in Pentair plc on October 14, 2024 and sell it today you would earn a total of 5,220 from holding Pentair plc or generate 118.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pentair plc vs. AEON STORES
Performance |
| Timeline |
| Pentair plc |
| AEON STORES |
Pentair Plc and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pentair Plc and AEON STORES
The main advantage of trading using opposite Pentair Plc and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentair Plc position performs unexpectedly, AEON STORES 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 AEON STORES will offset losses from the drop in AEON STORES's long position.| Pentair Plc vs. Xiwang Special Steel | Pentair Plc vs. STEEL DYNAMICS | Pentair Plc vs. Lifeway Foods | Pentair Plc vs. Mount Gibson Iron |
| AEON STORES vs. Alaska Air Group | AEON STORES vs. United Breweries Co | AEON STORES vs. China Resources Beer | AEON STORES vs. Pentair 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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