Correlation Between Fluent and Parker Hannifin

Can any of the company-specific risk be diversified away by investing in both Fluent 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 Fluent and Parker Hannifin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fluent Inc and Parker Hannifin, you can compare the effects of market volatilities on Fluent 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 Fluent with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Parker Hannifin.

Diversification Opportunities for Fluent and Parker Hannifin

-0.07

Correlation Coefficient

Fluent  Parker Hannifin

Good diversification

The 3 months correlation between Fluent and Parker is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and Fluent 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 Fluent Inc 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 Fluent i.e., Fluent and Parker Hannifin go up and down completely randomly.

Pair Corralation between Fluent and Parker Hannifin

Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Parker Hannifin. In addition to that, Fluent is 2.87 times more volatile than Parker Hannifin. It trades about -0.03 of its total potential returns per unit of risk. Parker Hannifin is currently generating about 0.09 per unit of volatility. If you would invest  33,983  in Parker Hannifin on October 26, 2024 and sell it today you would earn a total of  33,951  from holding Parker Hannifin or generate 99.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fluent Inc  vs.  Parker Hannifin

Fluent Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fluent Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Parker Hannifin

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Parker Hannifin are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal technical indicators, Parker Hannifin may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fluent and Parker Hannifin

The main advantage of trading using opposite Fluent and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent 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.

The idea behind Fluent Inc and Parker Hannifin pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.