Correlation Between Parker Hannifin and Fluent

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

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

Diversification Opportunities for Parker Hannifin and Fluent

-0.16

Correlation Coefficient

Parker Hannifin  Fluent

Good diversification

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

Pair Corralation between Parker Hannifin and Fluent

Allowing for the 90-day total investment horizon Parker Hannifin is expected to under-perform the Fluent. But the stock apears to be less risky and, when comparing its historical volatility, Parker Hannifin is 2.56 times less risky than Fluent. The stock trades about -0.22 of its potential returns per unit of risk. The Fluent Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  276.00  in Fluent Inc on October 11, 2024 and sell it today you would lose (4.00) from holding Fluent Inc or give up 1.45% of portfolio value over 90 days.

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

Parker Hannifin  vs.  Fluent Inc

Parker Hannifin

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Parker Hannifin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Parker Hannifin and Fluent

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

The idea behind Parker Hannifin and Fluent Inc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.