Correlation Between PARKEN Sport and GBS Software
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and GBS Software 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 GBS Software 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 GBS Software AG, you can compare the effects of market volatilities on PARKEN Sport and GBS Software 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 GBS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and GBS Software.
Diversification Opportunities for PARKEN Sport and GBS Software
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PARKEN and GBS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and GBS Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBS Software AG 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 GBS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBS Software AG has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and GBS Software go up and down completely randomly.
Pair Corralation between PARKEN Sport and GBS Software
Assuming the 90 days horizon PARKEN Sport is expected to generate 1.25 times less return on investment than GBS Software. In addition to that, PARKEN Sport is 1.24 times more volatile than GBS Software AG. It trades about 0.14 of its total potential returns per unit of risk. GBS Software AG is currently generating about 0.21 per unit of volatility. If you would invest 276.00 in GBS Software AG on October 30, 2024 and sell it today you would earn a total of 26.00 from holding GBS Software AG or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. GBS Software AG
Performance |
| Timeline |
| PARKEN Sport Enterta |
| GBS Software AG |
PARKEN Sport and GBS Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and GBS Software
The main advantage of trading using opposite PARKEN Sport and GBS Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, GBS Software 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 GBS Software will offset losses from the drop in GBS Software's long position.| PARKEN Sport vs. SEI INVESTMENTS | PARKEN Sport vs. ECHO INVESTMENT ZY | PARKEN Sport vs. Apollo Investment Corp | PARKEN Sport vs. Federal Agricultural Mortgage |
| GBS Software vs. EVS Broadcast Equipment | GBS Software vs. Elmos Semiconductor SE | GBS Software vs. Nordic Semiconductor ASA | GBS Software vs. Transport International 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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