Correlation Between Schindler Holding and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both Schindler Holding and Parker Hannifin 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 Schindler Holding and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schindler Holding AG and Parker Hannifin, you can compare the effects of market volatilities on Schindler Holding and Parker Hannifin 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 Schindler Holding with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schindler Holding and Parker Hannifin.
Diversification Opportunities for Schindler Holding and Parker Hannifin
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Schindler and Parker is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Schindler Holding AG and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and Schindler Holding 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 Schindler Holding AG are associated (or correlated) with Parker Hannifin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parker Hannifin has no effect on the direction of Schindler Holding i.e., Schindler Holding and Parker Hannifin go up and down completely randomly.
Pair Corralation between Schindler Holding and Parker Hannifin
Assuming the 90 days horizon Schindler Holding is expected to generate 1.5 times less return on investment than Parker Hannifin. In addition to that, Schindler Holding is 1.29 times more volatile than Parker Hannifin. It trades about 0.06 of its total potential returns per unit of risk. Parker Hannifin is currently generating about 0.12 per unit of volatility. If you would invest 28,184 in Parker Hannifin on August 30, 2024 and sell it today you would earn a total of 41,804 from holding Parker Hannifin or generate 148.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.93% |
| Values | Daily Returns |
Schindler Holding AG vs. Parker Hannifin
Performance |
| Timeline |
| Schindler Holding |
| Parker Hannifin |
Schindler Holding and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schindler Holding and Parker Hannifin
The main advantage of trading using opposite Schindler Holding and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schindler Holding position performs unexpectedly, Parker Hannifin 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 Parker Hannifin will offset losses from the drop in Parker Hannifin's long position.| Schindler Holding vs. Rockwell Automation | Schindler Holding vs. Parker Hannifin | Schindler Holding vs. Ingersoll Rand | Schindler Holding vs. Dover |
| Parker Hannifin vs. Illinois Tool Works | Parker Hannifin vs. Pentair PLC | Parker Hannifin vs. Emerson Electric | Parker Hannifin vs. Smith AO |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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