Correlation Between PARKEN Sport and British American
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and British American 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 British American 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 British American Tobacco, you can compare the effects of market volatilities on PARKEN Sport and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and British American.
Diversification Opportunities for PARKEN Sport and British American
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PARKEN and British is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and British American go up and down completely randomly.
Pair Corralation between PARKEN Sport and British American
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 6.45 times more return on investment than British American. However, PARKEN Sport is 6.45 times more volatile than British American Tobacco. It trades about 0.06 of its potential returns per unit of risk. British American Tobacco is currently generating about 0.07 per unit of risk. If you would invest 591.00 in PARKEN Sport Entertainment on August 26, 2024 and sell it today you would earn a total of 1,019 from holding PARKEN Sport Entertainment or generate 172.42% 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. British American Tobacco
Performance |
| Timeline |
| PARKEN Sport Enterta |
| British American Tobacco |
PARKEN Sport and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and British American
The main advantage of trading using opposite PARKEN Sport and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| PARKEN Sport vs. Science Applications International | PARKEN Sport vs. DOCDATA | PARKEN Sport vs. Zijin Mining Group | PARKEN Sport vs. Public Storage |
| British American vs. SIMS METAL MGT | British American vs. PARKEN Sport Entertainment | British American vs. Norwegian Air Shuttle | British American vs. CHINA TONTINE WINES |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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