Correlation Between Parker Hannifin and G III
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and G III 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 G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and G III Apparel Group, you can compare the effects of market volatilities on Parker Hannifin and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and G III.
Diversification Opportunities for Parker Hannifin and G III
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Parker and GIII is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and G III go up and down completely randomly.
Pair Corralation between Parker Hannifin and G III
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 0.87 times more return on investment than G III. However, Parker Hannifin is 1.15 times less risky than G III. It trades about -0.02 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.18 per unit of risk. If you would invest 64,228 in Parker Hannifin on December 18, 2024 and sell it today you would lose (2,070) from holding Parker Hannifin or give up 3.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Parker Hannifin vs. G III Apparel Group
Performance |
Timeline |
Parker Hannifin |
G III Apparel |
Parker Hannifin and G III Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Parker Hannifin and G III
The main advantage of trading using opposite Parker Hannifin and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.Parker Hannifin vs. Illinois Tool Works | Parker Hannifin vs. Pentair PLC | Parker Hannifin vs. Emerson Electric | Parker Hannifin vs. Smith AO |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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