Correlation Between Parker Hannifin and Under Armour | PH vs. UA

Correlation Between Parker Hannifin and Under Armour

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Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Under Armour 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 Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Under Armour C, you can compare the effects of market volatilities on Parker Hannifin and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Under Armour.

Diversification Opportunities for Parker Hannifin and Under Armour

ParkerUnderDiversified AwayParkerUnderDiversified Away100%
0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Parker and Under is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Under Armour go up and down completely randomly.

Pair Corralation between Parker Hannifin and Under Armour

Allowing for the 90-day total investment horizon Parker Hannifin is expected to under-perform the Under Armour. But the stock apears to be less risky and, when comparing its historical volatility, Parker Hannifin is 2.63 times less risky than Under Armour. The stock trades about -0.26 of its potential returns per unit of risk. The Under Armour C is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  832.00  in Under Armour C on September 21, 2024 and sell it today you would lose (54.00) from holding Under Armour C or give up 6.49% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Parker Hannifin  vs.  Under Armour C

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 5101520253035
JavaScript chart by amCharts 3.21.15PH UA
       Timeline  
Parker Hannifin 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Parker Hannifin are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Parker Hannifin is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec620640660680700720
Under Armour C 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Under Armour C are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Under Armour may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec7.588.599.51010.5

Parker Hannifin and Under Armour Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.74-3.55-2.36-1.170.01981.192.413.644.876.09 0.050.100.15
JavaScript chart by amCharts 3.21.15PH UA
       Returns  

Pair Trading with Parker Hannifin and Under Armour

The main advantage of trading using opposite Parker Hannifin and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.
The idea behind Parker Hannifin and Under Armour C 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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