Correlation Between PARKEN Sport and WINMARK
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and WINMARK 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 WINMARK 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 WINMARK, you can compare the effects of market volatilities on PARKEN Sport and WINMARK 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 WINMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and WINMARK.
Diversification Opportunities for PARKEN Sport and WINMARK
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PARKEN and WINMARK is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and WINMARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINMARK 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 WINMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINMARK has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and WINMARK go up and down completely randomly.
Pair Corralation between PARKEN Sport and WINMARK
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 2.3 times more return on investment than WINMARK. However, PARKEN Sport is 2.3 times more volatile than WINMARK. It trades about 0.17 of its potential returns per unit of risk. WINMARK is currently generating about -0.13 per unit of risk. If you would invest 1,685 in PARKEN Sport Entertainment on October 25, 2024 and sell it today you would earn a total of 135.00 from holding PARKEN Sport Entertainment or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. WINMARK
Performance |
| Timeline |
| PARKEN Sport Enterta |
| WINMARK |
PARKEN Sport and WINMARK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and WINMARK
The main advantage of trading using opposite PARKEN Sport and WINMARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, WINMARK 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 WINMARK will offset losses from the drop in WINMARK's long position.| PARKEN Sport vs. TEXAS ROADHOUSE | PARKEN Sport vs. Liberty Broadband | PARKEN Sport vs. Commercial Vehicle Group | PARKEN Sport vs. Tower Semiconductor |
| WINMARK vs. Beazer Homes USA | WINMARK vs. PULSION Medical Systems | WINMARK vs. CREO MEDICAL GRP | WINMARK vs. Haverty Furniture Companies |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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