Correlation Between PARKEN Sport and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and COVIVIO 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 COVIVIO 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 COVIVIO HOTELS INH, you can compare the effects of market volatilities on PARKEN Sport and COVIVIO 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 COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and COVIVIO HOTELS.
Diversification Opportunities for PARKEN Sport and COVIVIO HOTELS
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PARKEN and COVIVIO is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH 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 COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between PARKEN Sport and COVIVIO HOTELS
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 2.26 times more return on investment than COVIVIO HOTELS. However, PARKEN Sport is 2.26 times more volatile than COVIVIO HOTELS INH. It trades about 0.06 of its potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about -0.26 per unit of risk. If you would invest 1,715 in PARKEN Sport Entertainment on November 1, 2024 and sell it today you would earn a total of 45.00 from holding PARKEN Sport Entertainment or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| PARKEN Sport Enterta |
| COVIVIO HOTELS INH |
PARKEN Sport and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and COVIVIO HOTELS
The main advantage of trading using opposite PARKEN Sport and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, COVIVIO 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| PARKEN Sport vs. NTG Nordic Transport | PARKEN Sport vs. DICKS Sporting Goods | PARKEN Sport vs. JD SPORTS FASH | PARKEN Sport vs. CeoTronics AG |
| COVIVIO HOTELS vs. TOWNSQUARE MEDIA INC | COVIVIO HOTELS vs. Transport International Holdings | COVIVIO HOTELS vs. PARKEN Sport Entertainment | COVIVIO HOTELS vs. TITANIUM TRANSPORTGROUP |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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