Correlation Between PARKEN Sport and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH, you can compare the effects of market volatilities on PARKEN Sport and FEMALE HEALTH 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 FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and FEMALE HEALTH.
Diversification Opportunities for PARKEN Sport and FEMALE HEALTH
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between PARKEN and FEMALE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between PARKEN Sport and FEMALE HEALTH
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.0 times more return on investment than FEMALE HEALTH. However, PARKEN Sport Entertainment is 1.0 times less risky than FEMALE HEALTH. It trades about 0.06 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about -0.04 per unit of risk. If you would invest 399.00 in PARKEN Sport Entertainment on September 2, 2024 and sell it today you would earn a total of 1,196 from holding PARKEN Sport Entertainment or generate 299.75% 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. FEMALE HEALTH
Performance |
| Timeline |
| PARKEN Sport Enterta |
| FEMALE HEALTH |
PARKEN Sport and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and FEMALE HEALTH
The main advantage of trading using opposite PARKEN Sport and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| PARKEN Sport vs. DAIRY FARM INTL | PARKEN Sport vs. Chongqing Machinery Electric | PARKEN Sport vs. Nufarm Limited | PARKEN Sport vs. CNVISION MEDIA |
| FEMALE HEALTH vs. SIVERS SEMICONDUCTORS AB | FEMALE HEALTH vs. Darden Restaurants | FEMALE HEALTH vs. Reliance Steel Aluminum | FEMALE HEALTH vs. Q2M Managementberatung AG |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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