Correlation Between Pentair PLC and Where Food

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

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

Diversification Opportunities for Pentair PLC and Where Food

0.82

Correlation Coefficient

Pentair PLC  Where Food

Very poor diversification

The 3 months correlation between Pentair and Where is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pentair PLC and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes and Pentair PLC 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 Pentair PLC are associated (or correlated) with Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of Pentair PLC i.e., Pentair PLC and Where Food go up and down completely randomly.

Pair Corralation between Pentair PLC and Where Food

Considering the 90-day investment horizon Pentair PLC is expected to generate 0.52 times more return on investment than Where Food. However, Pentair PLC is 1.93 times less risky than Where Food. It trades about -0.15 of its potential returns per unit of risk. Where Food Comes is currently generating about -0.08 per unit of risk. If you would invest  10,014  in Pentair PLC on December 28, 2024 and sell it today you would lose (1,330) from holding Pentair PLC or give up 13.28% of portfolio value over 90 days.

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

Pentair PLC  vs.  Where Food Comes

Pentair PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pentair PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Where Food Comes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Where Food Comes 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 fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Pentair PLC and Where Food

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

The idea behind Pentair PLC and Where Food Comes 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.