Correlation Between Teleflex Incorporated and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both Teleflex Incorporated 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 Teleflex Incorporated and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleflex Incorporated and Parker Hannifin, you can compare the effects of market volatilities on Teleflex Incorporated 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 Teleflex Incorporated with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and Parker Hannifin.
Diversification Opportunities for Teleflex Incorporated and Parker Hannifin
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Teleflex and Parker is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and Teleflex Incorporated 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 Teleflex Incorporated 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 Teleflex Incorporated i.e., Teleflex Incorporated and Parker Hannifin go up and down completely randomly.
Pair Corralation between Teleflex Incorporated and Parker Hannifin
Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the Parker Hannifin. In addition to that, Teleflex Incorporated is 1.14 times more volatile than Parker Hannifin. It trades about -0.01 of its total potential returns per unit of risk. Parker Hannifin is currently generating about 0.11 per unit of volatility. If you would invest 39,027 in Parker Hannifin on September 12, 2024 and sell it today you would earn a total of 28,766 from holding Parker Hannifin or generate 73.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleflex Incorporated vs. Parker Hannifin
Performance |
| Timeline |
| Teleflex Incorporated |
| Parker Hannifin |
Teleflex Incorporated and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleflex Incorporated and Parker Hannifin
The main advantage of trading using opposite Teleflex Incorporated and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleflex Incorporated 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.| Teleflex Incorporated vs. West Pharmaceutical Services | Teleflex Incorporated vs. Alcon AG | Teleflex Incorporated vs. ResMed Inc | Teleflex Incorporated vs. ICU Medical |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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