Correlation Between SL Green and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both SL Green 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 SL Green and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SL Green Realty and Parker Hannifin, you can compare the effects of market volatilities on SL Green 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 SL Green with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Parker Hannifin.
Diversification Opportunities for SL Green and Parker Hannifin
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SLG and Parker is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and SL Green 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 SL Green Realty 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 SL Green i.e., SL Green and Parker Hannifin go up and down completely randomly.
Pair Corralation between SL Green and Parker Hannifin
Considering the 90-day investment horizon SL Green is expected to generate 3.87 times less return on investment than Parker Hannifin. But when comparing it to its historical volatility, SL Green Realty is 1.2 times less risky than Parker Hannifin. It trades about 0.09 of its potential returns per unit of risk. Parker Hannifin is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 62,267 in Parker Hannifin on August 25, 2024 and sell it today you would earn a total of 8,420 from holding Parker Hannifin or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SL Green Realty vs. Parker Hannifin
Performance |
| Timeline |
| SL Green Realty |
| Parker Hannifin |
SL Green and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Parker Hannifin
The main advantage of trading using opposite SL Green and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green 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.| SL Green vs. Boston Properties | SL Green vs. Alexandria Real Estate | SL Green vs. Vornado Realty Trust | SL Green vs. Highwoods Properties |
| Parker Hannifin vs. Aquagold International | Parker Hannifin vs. Morningstar Unconstrained Allocation | Parker Hannifin vs. High Yield Municipal Fund | Parker Hannifin vs. Thrivent High Yield |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |