Correlation Between Teleflex and Parker Hannifin

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

By analyzing existing cross correlation between Teleflex 4625 percent and Parker Hannifin, you can compare the effects of market volatilities on Teleflex and Parker Hannifin 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 Teleflex with a short position of Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex and Parker Hannifin.

Diversification Opportunities for Teleflex and Parker Hannifin

-0.49

Correlation Coefficient

Teleflex  Parker Hannifin

Very good diversification

The 3 months correlation between Teleflex and Parker is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex 4625 percent and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin and Teleflex 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 Teleflex 4625 percent are associated (or correlated) with Parker Hannifin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parker Hannifin has no effect on the direction of Teleflex i.e., Teleflex and Parker Hannifin go up and down completely randomly.

Pair Corralation between Teleflex and Parker Hannifin

Assuming the 90 days trading horizon Teleflex 4625 percent is expected to under-perform the Parker Hannifin. But the bond apears to be less risky and, when comparing its historical volatility, Teleflex 4625 percent is 4.12 times less risky than Parker Hannifin. The bond trades about -0.05 of its potential returns per unit of risk. The Parker Hannifin is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  58,616  in Parker Hannifin on September 12, 2024 and sell it today you would earn a total of  10,034  from holding Parker Hannifin or generate 17.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Teleflex 4625 percent  vs.  Parker Hannifin

Teleflex 4625 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teleflex 4625 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Teleflex is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Parker Hannifin

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Parker Hannifin are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal technical indicators, Parker Hannifin demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teleflex and Parker Hannifin

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

The idea behind Teleflex 4625 percent and Parker Hannifin 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.