Correlation Between Parker Hannifin and Barnes

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Barnes 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 Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Barnes Group, you can compare the effects of market volatilities on Parker Hannifin and Barnes 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 Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Barnes.

Diversification Opportunities for Parker Hannifin and Barnes

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Parker and Barnes is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Parker-Hannifin and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group 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 Barnes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barnes Group has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Barnes go up and down completely randomly.

Pair Corralation between Parker Hannifin and Barnes

Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 1.18 times less return on investment than Barnes. But when comparing it to its historical volatility, Parker Hannifin is 1.85 times less risky than Barnes. It trades about 0.24 of its potential returns per unit of risk. Barnes Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3,545  in Barnes Group on December 29, 2023 and sell it today you would earn a total of  203.00  from holding Barnes Group or generate 5.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Parker-Hannifin  vs.  Barnes Group

 Performance 
       Timeline  
Parker-Hannifin 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Parker Hannifin are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal technical indicators, Parker Hannifin demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Barnes Group 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, Barnes sustained solid returns over the last few months and may actually be approaching a breakup point.

Parker Hannifin and Barnes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Parker Hannifin and Barnes

The main advantage of trading using opposite Parker Hannifin and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Barnes 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 Barnes will offset losses from the drop in Barnes' long position.
The idea behind Parker Hannifin and Barnes Group 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.
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios