Correlation Between Parker Hannifin and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Xinjiang Goldwind 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 Xinjiang Goldwind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Xinjiang Goldwind Science, you can compare the effects of market volatilities on Parker Hannifin and Xinjiang Goldwind 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 Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Xinjiang Goldwind.
Diversification Opportunities for Parker Hannifin and Xinjiang Goldwind
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Parker and Xinjiang is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science 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 Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Parker Hannifin and Xinjiang Goldwind
Allowing for the 90-day total investment horizon Parker Hannifin is expected to under-perform the Xinjiang Goldwind. But the stock apears to be less risky and, when comparing its historical volatility, Parker Hannifin is 3.39 times less risky than Xinjiang Goldwind. The stock trades about -0.1 of its potential returns per unit of risk. The Xinjiang Goldwind Science is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Xinjiang Goldwind Science on March 2, 2024 and sell it today you would earn a total of 10.00 from holding Xinjiang Goldwind Science or generate 26.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Parker Hannifin vs. Xinjiang Goldwind Science
Performance |
Timeline |
Parker Hannifin |
Xinjiang Goldwind Science |
Parker Hannifin and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Parker Hannifin and Xinjiang Goldwind
The main advantage of trading using opposite Parker Hannifin and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Xinjiang Goldwind 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 Xinjiang Goldwind will offset losses from the drop in Xinjiang Goldwind's long position.Parker Hannifin vs. Illinois Tool Works | Parker Hannifin vs. Pentair PLC | Parker Hannifin vs. Emerson Electric | Parker Hannifin vs. Smith AO |
Xinjiang Goldwind vs. Hillenbrand | Xinjiang Goldwind vs. Generac Holdings | Xinjiang Goldwind vs. Aumann AG | Xinjiang Goldwind vs. Atlas Copco ADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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