Correlation Between Pentair PLC and London Security
Can any of the company-specific risk be diversified away by investing in both Pentair PLC and London Security 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 London Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pentair PLC and London Security Plc, you can compare the effects of market volatilities on Pentair PLC and London Security 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 London Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentair PLC and London Security.
Diversification Opportunities for Pentair PLC and London Security
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pentair and London is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pentair PLC and London Security Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on London Security Plc 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 London Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of London Security Plc has no effect on the direction of Pentair PLC i.e., Pentair PLC and London Security go up and down completely randomly.
Pair Corralation between Pentair PLC and London Security
Assuming the 90 days trading horizon Pentair PLC is expected to under-perform the London Security. But the stock apears to be less risky and, when comparing its historical volatility, Pentair PLC is 146.7 times less risky than London Security. The stock trades about -0.12 of its potential returns per unit of risk. The London Security Plc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 339,162 in London Security Plc on August 27, 2025 and sell it today you would lose (54,162) from holding London Security Plc or give up 15.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pentair PLC vs. London Security Plc
Performance |
| Timeline |
| Pentair PLC |
| London Security Plc |
Pentair PLC and London Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pentair PLC and London Security
The main advantage of trading using opposite Pentair PLC and London Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentair PLC position performs unexpectedly, London Security 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 London Security will offset losses from the drop in London Security's long position.| Pentair PLC vs. JLEN Environmental Assets | Pentair PLC vs. Alfa Financial Software | Pentair PLC vs. Check Point Software | Pentair PLC vs. Aptitude Software Group |
| London Security vs. Games Workshop Group | London Security vs. Pentair PLC | London Security vs. Westlake Chemical Corp | London Security vs. Norwegian Air Shuttle |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance |