Correlation Between PARKEN Sport and Gentex
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Gentex 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 Gentex 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 Gentex, you can compare the effects of market volatilities on PARKEN Sport and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Gentex.
Diversification Opportunities for PARKEN Sport and Gentex
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between PARKEN and Gentex is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Gentex go up and down completely randomly.
Pair Corralation between PARKEN Sport and Gentex
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 4.25 times more return on investment than Gentex. However, PARKEN Sport is 4.25 times more volatile than Gentex. It trades about 0.04 of its potential returns per unit of risk. Gentex is currently generating about -0.81 per unit of risk. If you would invest 1,745 in PARKEN Sport Entertainment on October 15, 2024 and sell it today you would earn a total of 20.00 from holding PARKEN Sport Entertainment or generate 1.15% 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. Gentex
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Gentex |
PARKEN Sport and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Gentex
The main advantage of trading using opposite PARKEN Sport and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.| PARKEN Sport vs. Major Drilling Group | PARKEN Sport vs. CarsalesCom | PARKEN Sport vs. CANON MARKETING JP | PARKEN Sport vs. FAST RETAIL ADR |
| Gentex vs. PARKEN Sport Entertainment | Gentex vs. ZINC MEDIA GR | Gentex vs. North American Construction | Gentex vs. Hollywood Bowl Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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