Correlation Between PARKEN Sport and Chuangs China
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Chuangs China 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 Chuangs China 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 Chuangs China Investments, you can compare the effects of market volatilities on PARKEN Sport and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Chuangs China.
Diversification Opportunities for PARKEN Sport and Chuangs China
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PARKEN and Chuangs is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Chuangs China go up and down completely randomly.
Pair Corralation between PARKEN Sport and Chuangs China
If you would invest 1,605 in PARKEN Sport Entertainment on August 31, 2024 and sell it today you would earn a total of 0.00 from holding PARKEN Sport Entertainment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. Chuangs China Investments
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Chuangs China Investments |
PARKEN Sport and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Chuangs China
The main advantage of trading using opposite PARKEN Sport and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| PARKEN Sport vs. PennantPark Investment | PARKEN Sport vs. Japan Tobacco | PARKEN Sport vs. BORR DRILLING NEW | PARKEN Sport vs. Virtus Investment Partners |
| Chuangs China vs. Sun Hung Kai | Chuangs China vs. China Overseas Land | Chuangs China vs. CHINA VANKE TD | Chuangs China vs. Longfor Group Holdings |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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