Correlation Between PARKEN Sport and KENNAMETAL INC
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and KENNAMETAL INC 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 KENNAMETAL INC 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 KENNAMETAL INC, you can compare the effects of market volatilities on PARKEN Sport and KENNAMETAL INC 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 KENNAMETAL INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and KENNAMETAL INC.
Diversification Opportunities for PARKEN Sport and KENNAMETAL INC
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PARKEN and KENNAMETAL is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and KENNAMETAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENNAMETAL INC 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 KENNAMETAL INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENNAMETAL INC has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and KENNAMETAL INC go up and down completely randomly.
Pair Corralation between PARKEN Sport and KENNAMETAL INC
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.33 times more return on investment than KENNAMETAL INC. However, PARKEN Sport is 1.33 times more volatile than KENNAMETAL INC. It trades about 0.12 of its potential returns per unit of risk. KENNAMETAL INC is currently generating about -0.22 per unit of risk. If you would invest 1,615 in PARKEN Sport Entertainment on September 15, 2024 and sell it today you would earn a total of 80.00 from holding PARKEN Sport Entertainment or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. KENNAMETAL INC
Performance |
| Timeline |
| PARKEN Sport Enterta |
| KENNAMETAL INC |
PARKEN Sport and KENNAMETAL INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and KENNAMETAL INC
The main advantage of trading using opposite PARKEN Sport and KENNAMETAL INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, KENNAMETAL INC 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 KENNAMETAL INC will offset losses from the drop in KENNAMETAL INC's long position.| PARKEN Sport vs. The Walt Disney | PARKEN Sport vs. Charter Communications | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp |
| KENNAMETAL INC vs. Seven West Media | KENNAMETAL INC vs. PARKEN Sport Entertainment | KENNAMETAL INC vs. SWISS WATER DECAFFCOFFEE | KENNAMETAL INC vs. PLAYSTUDIOS A DL 0001 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |