Correlation Between Parker Hannifin and Cabot Oil
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Cabot Oil 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 Cabot Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Cabot Oil Gas, you can compare the effects of market volatilities on Parker Hannifin and Cabot Oil 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 Cabot Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Cabot Oil.
Diversification Opportunities for Parker Hannifin and Cabot Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Parker and Cabot is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Cabot Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabot Oil Gas 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 Cabot Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabot Oil Gas has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Cabot Oil go up and down completely randomly.
Pair Corralation between Parker Hannifin and Cabot Oil
If you would invest (100.00) in Cabot Oil Gas on February 4, 2024 and sell it today you would earn a total of 100.00 from holding Cabot Oil Gas or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Parker Hannifin vs. Cabot Oil Gas
Performance |
| Timeline |
| Parker Hannifin |
| Cabot Oil Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Parker Hannifin and Cabot Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and Cabot Oil
The main advantage of trading using opposite Parker Hannifin and Cabot Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Cabot Oil 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 Cabot Oil will offset losses from the drop in Cabot Oil's long position.The idea behind Parker Hannifin and Cabot Oil Gas 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.| Cabot Oil vs. Q2 Holdings | Cabot Oil vs. Kaltura | Cabot Oil vs. CDW Corp | Cabot Oil vs. Calliditas Therapeutics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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