Correlation Between Pentair PLC and Internetarray

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

By analyzing existing cross correlation between Pentair PLC and Internetarray, you can compare the effects of market volatilities on Pentair PLC and Internetarray 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 Pentair PLC with a short position of Internetarray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentair PLC and Internetarray.

Diversification Opportunities for Pentair PLC and Internetarray

0.0

Correlation Coefficient

Pentair PLC  Internetarray

Pay attention - limited upside

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

Pair Corralation between Pentair PLC and Internetarray

If you would invest  4,877  in Pentair PLC on January 20, 2024 and sell it today you would earn a total of  2,971  from holding Pentair PLC or generate 60.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Pentair PLC  vs.  Internetarray

Pentair PLC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pentair PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Pentair PLC may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Internetarray

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Internetarray has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Internetarray is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pentair PLC and Internetarray

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

The idea behind Pentair PLC and Internetarray 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.