Correlation Between PARKEN Sport and EQT AB
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and EQT AB 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 EQT AB 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 EQT AB, you can compare the effects of market volatilities on PARKEN Sport and EQT AB 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 EQT AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and EQT AB.
Diversification Opportunities for PARKEN Sport and EQT AB
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PARKEN and EQT is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and EQT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT AB 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 EQT AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT AB has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and EQT AB go up and down completely randomly.
Pair Corralation between PARKEN Sport and EQT AB
Assuming the 90 days horizon PARKEN Sport is expected to generate 2.34 times less return on investment than EQT AB. But when comparing it to its historical volatility, PARKEN Sport Entertainment is 1.08 times less risky than EQT AB. It trades about 0.15 of its potential returns per unit of risk. EQT AB is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,374 in EQT AB on September 20, 2024 and sell it today you would earn a total of 417.00 from holding EQT AB or generate 17.57% 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. EQT AB
Performance |
| Timeline |
| PARKEN Sport Enterta |
| EQT AB |
PARKEN Sport and EQT AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and EQT AB
The main advantage of trading using opposite PARKEN Sport and EQT AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, EQT AB 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 EQT AB will offset losses from the drop in EQT AB's long position.| PARKEN Sport vs. The Walt Disney | PARKEN Sport vs. Charter Communications | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. SIVERS SEMICONDUCTORS AB |
| EQT AB vs. Ameriprise Financial | EQT AB vs. Ares Management Corp | EQT AB vs. Superior Plus Corp | EQT AB vs. SIVERS SEMICONDUCTORS AB |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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