Correlation Between PARKEN Sport and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY, you can compare the effects of market volatilities on PARKEN Sport and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and AECOM TECHNOLOGY.
Diversification Opportunities for PARKEN Sport and AECOM TECHNOLOGY
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between PARKEN and AECOM is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between PARKEN Sport and AECOM TECHNOLOGY
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 2.79 times more return on investment than AECOM TECHNOLOGY. However, PARKEN Sport is 2.79 times more volatile than AECOM TECHNOLOGY. It trades about 0.21 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.07 per unit of risk. If you would invest 1,680 in PARKEN Sport Entertainment on October 22, 2024 and sell it today you would earn a total of 165.00 from holding PARKEN Sport Entertainment or generate 9.82% 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. AECOM TECHNOLOGY
Performance |
| Timeline |
| PARKEN Sport Enterta |
| AECOM TECHNOLOGY |
PARKEN Sport and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and AECOM TECHNOLOGY
The main advantage of trading using opposite PARKEN Sport and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| PARKEN Sport vs. American Eagle Outfitters | PARKEN Sport vs. TRADEDOUBLER AB SK | PARKEN Sport vs. Tencent Music Entertainment | PARKEN Sport vs. RCS MediaGroup SpA |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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