Correlation Between Parker Hannifin and Investors Bancorp

Can any of the company-specific risk be diversified away by investing in both Parker Hannifin and Investors Bancorp 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 Investors Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Parker Hannifin and Investors Bancorp, you can compare the effects of market volatilities on Parker Hannifin and Investors Bancorp 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 Investors Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Investors Bancorp.

Diversification Opportunities for Parker Hannifin and Investors Bancorp

0.0

Correlation Coefficient

Parker Hannifin  Investors Bancorp

Pay attention - limited upside

The 3 months correlation between Parker and Investors is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin and Investors Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investors Bancorp 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 Investors Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investors Bancorp has no effect on the direction of Parker Hannifin i.e., Parker Hannifin and Investors Bancorp go up and down completely randomly.

Pair Corralation between Parker Hannifin and Investors Bancorp

If you would invest (100.00) in Investors Bancorp on February 3, 2024 and sell it today you would earn a total of  100.00  from holding Investors Bancorp 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.  Investors Bancorp

Parker Hannifin

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Parker Hannifin are ranked lower than 6 (%) 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 recent stock price confusion, may contribute to short-horizon losses for the traders.

Investors Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investors Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Investors Bancorp is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Parker Hannifin and Investors Bancorp

The main advantage of trading using opposite Parker Hannifin and Investors Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin position performs unexpectedly, Investors Bancorp 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 Investors Bancorp will offset losses from the drop in Investors Bancorp's long position.

The idea behind Parker Hannifin and Investors Bancorp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.