Correlation Between Parker Hannifin and QT Imaging

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

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

Diversification Opportunities for Parker Hannifin and QT Imaging

-0.35

Correlation Coefficient

Parker Hannifin  QT Imaging

Very good diversification

The 3 months correlation between Parker and QTI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and QT Imaging Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QT Imaging Holdings 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 QT Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QT Imaging Holdings has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and QT Imaging go up and down completely randomly.

Pair Corralation between Parker Hannifin and QT Imaging

Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 0.23 times more return on investment than QT Imaging. However, Parker Hannifin is 4.36 times less risky than QT Imaging. It trades about 0.1 of its potential returns per unit of risk. QT Imaging Holdings is currently generating about -0.07 per unit of risk. If you would invest  38,298  in Parker Hannifin on October 22, 2024 and sell it today you would earn a total of  28,648  from holding Parker Hannifin or generate 74.8% 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.  QT Imaging Holdings

Parker Hannifin

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Parker Hannifin are ranked lower than 5 (%) 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.

QT Imaging Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QT Imaging Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Parker Hannifin and QT Imaging

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

The idea behind Parker Hannifin and QT Imaging Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.