Correlation Between Parker Hannifin and Anterix

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

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

Diversification Opportunities for Parker Hannifin and Anterix

-0.16

Correlation Coefficient

Parker Hannifin  Anterix

Good diversification

The 3 months correlation between Parker and Anterix is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix and Parker Hannifin 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 Parker Hannifin are associated (or correlated) with Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Anterix go up and down completely randomly.

Pair Corralation between Parker Hannifin and Anterix

Allowing for the 90-day total investment horizon Parker Hannifin is expected to under-perform the Anterix. But the stock apears to be less risky and, when comparing its historical volatility, Parker Hannifin is 2.49 times less risky than Anterix. The stock trades about 0.0 of its potential returns per unit of risk. The Anterix is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,125  in Anterix on December 25, 2024 and sell it today you would earn a total of  689.00  from holding Anterix or generate 22.05% return on investment over 90 days.

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

Parker Hannifin  vs.  Anterix

Parker Hannifin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Parker Hannifin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Parker Hannifin is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Anterix

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anterix are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Anterix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Parker Hannifin and Anterix

The main advantage of trading using opposite Parker Hannifin and Anterix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Anterix 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 Anterix will offset losses from the drop in Anterix's long position.

The idea behind Parker Hannifin and Anterix 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.