Correlation Between PARKEN Sport and BRAEMAR HOTELS
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and BRAEMAR HOTELS 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 BRAEMAR HOTELS 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 BRAEMAR HOTELS RES, you can compare the effects of market volatilities on PARKEN Sport and BRAEMAR HOTELS 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 BRAEMAR HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and BRAEMAR HOTELS.
Diversification Opportunities for PARKEN Sport and BRAEMAR HOTELS
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PARKEN and BRAEMAR is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES 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 BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and BRAEMAR HOTELS go up and down completely randomly.
Pair Corralation between PARKEN Sport and BRAEMAR HOTELS
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.27 times more return on investment than BRAEMAR HOTELS. However, PARKEN Sport is 1.27 times more volatile than BRAEMAR HOTELS RES. It trades about 0.06 of its potential returns per unit of risk. BRAEMAR HOTELS RES is currently generating about 0.01 per unit of risk. If you would invest 437.00 in PARKEN Sport Entertainment on October 11, 2024 and sell it today you would earn a total of 1,338 from holding PARKEN Sport Entertainment or generate 306.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. BRAEMAR HOTELS RES
Performance |
| Timeline |
| PARKEN Sport Enterta |
| BRAEMAR HOTELS RES |
PARKEN Sport and BRAEMAR HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and BRAEMAR HOTELS
The main advantage of trading using opposite PARKEN Sport and BRAEMAR HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, BRAEMAR HOTELS 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 BRAEMAR HOTELS will offset losses from the drop in BRAEMAR HOTELS's long position.| PARKEN Sport vs. FAIR ISAAC | PARKEN Sport vs. INFORMATION SVC GRP | PARKEN Sport vs. DATAGROUP SE | PARKEN Sport vs. Westinghouse Air Brake |
| BRAEMAR HOTELS vs. PARKEN Sport Entertainment | BRAEMAR HOTELS vs. ARDAGH METAL PACDL 0001 | BRAEMAR HOTELS vs. Osisko Metals | BRAEMAR HOTELS vs. UPDATE SOFTWARE |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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