Correlation Between Wendys and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both Wendys 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 Wendys and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Wendys Co and Parker Hannifin, you can compare the effects of market volatilities on Wendys 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 Wendys with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and Parker Hannifin.
Diversification Opportunities for Wendys and Parker Hannifin
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wendys and Parker is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and Wendys 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 The Wendys Co 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 Wendys i.e., Wendys and Parker Hannifin go up and down completely randomly.
Pair Corralation between Wendys and Parker Hannifin
Considering the 90-day investment horizon The Wendys Co is expected to under-perform the Parker Hannifin. In addition to that, Wendys is 1.33 times more volatile than Parker Hannifin. It trades about -0.15 of its total potential returns per unit of risk. Parker Hannifin is currently generating about -0.1 per unit of volatility. If you would invest 69,932 in Parker Hannifin on September 13, 2024 and sell it today you would lose (1,293) from holding Parker Hannifin or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Wendys Co vs. Parker Hannifin
Performance |
| Timeline |
| The Wendys |
| Parker Hannifin |
Wendys and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wendys and Parker Hannifin
The main advantage of trading using opposite Wendys and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys 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.| Wendys vs. Yum Brands | Wendys vs. Dominos Pizza | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |