Correlation Between PARKEN Sport and Hua Hong
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Hua Hong 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 PARKEN Sport and Hua Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKEN Sport Entertainment and Hua Hong Semiconductor, you can compare the effects of market volatilities on PARKEN Sport and Hua Hong 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 PARKEN Sport with a short position of Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Hua Hong.
Diversification Opportunities for PARKEN Sport and Hua Hong
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between PARKEN and Hua is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor and PARKEN Sport 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 PARKEN Sport Entertainment are associated (or correlated) with Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Hua Hong go up and down completely randomly.
Pair Corralation between PARKEN Sport and Hua Hong
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.61 times more return on investment than Hua Hong. However, PARKEN Sport is 1.61 times more volatile than Hua Hong Semiconductor. It trades about 0.07 of its potential returns per unit of risk. Hua Hong Semiconductor is currently generating about 0.0 per unit of risk. If you would invest 437.00 in PARKEN Sport Entertainment on October 9, 2024 and sell it today you would earn a total of 1,438 from holding PARKEN Sport Entertainment or generate 329.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. Hua Hong Semiconductor
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Hua Hong Semiconductor |
PARKEN Sport and Hua Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Hua Hong
The main advantage of trading using opposite PARKEN Sport and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.| PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. NMI Holdings | PARKEN Sport vs. SIVERS SEMICONDUCTORS AB |
| Hua Hong vs. Coor Service Management | Hua Hong vs. VULCAN MATERIALS | Hua Hong vs. Sims Metal Management | Hua Hong vs. SANOK RUBBER ZY |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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