Correlation Between Parker Hannifin and Ampco Pittsburgh
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Ampco Pittsburgh 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 Ampco Pittsburgh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Ampco Pittsburgh, you can compare the effects of market volatilities on Parker Hannifin and Ampco Pittsburgh 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 Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Ampco Pittsburgh.
Diversification Opportunities for Parker Hannifin and Ampco Pittsburgh
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Parker and Ampco is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh 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 Ampco Pittsburgh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampco Pittsburgh has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Ampco Pittsburgh go up and down completely randomly.
Pair Corralation between Parker Hannifin and Ampco Pittsburgh
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 0.19 times more return on investment than Ampco Pittsburgh. However, Parker Hannifin is 5.33 times less risky than Ampco Pittsburgh. It trades about -0.1 of its potential returns per unit of risk. Ampco Pittsburgh is currently generating about -0.19 per unit of risk. If you would invest 55,053 in Parker Hannifin on January 24, 2024 and sell it today you would lose (1,081) from holding Parker Hannifin or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parker Hannifin vs. Ampco Pittsburgh
Performance |
| Timeline |
| Parker Hannifin |
| Ampco Pittsburgh |
Parker Hannifin and Ampco Pittsburgh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and Ampco Pittsburgh
The main advantage of trading using opposite Parker Hannifin and Ampco Pittsburgh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Ampco Pittsburgh 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 Ampco Pittsburgh will offset losses from the drop in Ampco Pittsburgh's long position.| Parker Hannifin vs. Emerson Electric | Parker Hannifin vs. Eaton PLC | Parker Hannifin vs. Generac Holdings | Parker Hannifin vs. Cummins |
| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. ESAB Corp | Ampco Pittsburgh vs. Gulf Island Fabrication |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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