Correlation Between Rockwell Automation and Cummins
Can any of the company-specific risk be diversified away by investing in both Rockwell Automation and Cummins 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 Rockwell Automation and Cummins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockwell Automation and Cummins, you can compare the effects of market volatilities on Rockwell Automation and Cummins 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 Rockwell Automation with a short position of Cummins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockwell Automation and Cummins.
Diversification Opportunities for Rockwell Automation and Cummins
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rockwell and Cummins is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Rockwell Automation and Cummins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cummins and Rockwell Automation 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 Rockwell Automation are associated (or correlated) with Cummins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cummins has no effect on the direction of Rockwell Automation i.e., Rockwell Automation and Cummins go up and down completely randomly.
Pair Corralation between Rockwell Automation and Cummins
Considering the 90-day investment horizon Rockwell Automation is expected to under-perform the Cummins. In addition to that, Rockwell Automation is 1.81 times more volatile than Cummins. It trades about -0.1 of its total potential returns per unit of risk. Cummins is currently generating about 0.01 per unit of volatility. If you would invest 29,182 in Cummins on January 26, 2024 and sell it today you would earn a total of 52.00 from holding Cummins or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rockwell Automation vs. Cummins
Performance |
| Timeline |
| Rockwell Automation |
| Cummins |
Rockwell Automation and Cummins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockwell Automation and Cummins
The main advantage of trading using opposite Rockwell Automation and Cummins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockwell Automation position performs unexpectedly, Cummins 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 Cummins will offset losses from the drop in Cummins' long position.| Rockwell Automation vs. Enerpac Tool Group | Rockwell Automation vs. Enpro Industries | Rockwell Automation vs. Omega Flex | Rockwell Automation vs. Gorman Rupp |
| Cummins vs. Parker Hannifin | Cummins vs. Emerson Electric | Cummins vs. Smith AO | Cummins vs. Watts Water Technologies |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |