Correlation Between PARKEN Sport and LIFEWAY FOODS
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and LIFEWAY FOODS 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 LIFEWAY FOODS 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 LIFEWAY FOODS, you can compare the effects of market volatilities on PARKEN Sport and LIFEWAY FOODS 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 LIFEWAY FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and LIFEWAY FOODS.
Diversification Opportunities for PARKEN Sport and LIFEWAY FOODS
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PARKEN and LIFEWAY is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and LIFEWAY FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFEWAY FOODS 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 LIFEWAY FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFEWAY FOODS has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and LIFEWAY FOODS go up and down completely randomly.
Pair Corralation between PARKEN Sport and LIFEWAY FOODS
Assuming the 90 days horizon PARKEN Sport is expected to generate 7.86 times less return on investment than LIFEWAY FOODS. But when comparing it to its historical volatility, PARKEN Sport Entertainment is 3.36 times less risky than LIFEWAY FOODS. It trades about 0.05 of its potential returns per unit of risk. LIFEWAY FOODS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,130 in LIFEWAY FOODS on September 5, 2024 and sell it today you would earn a total of 1,090 from holding LIFEWAY FOODS or generate 96.46% 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. LIFEWAY FOODS
Performance |
| Timeline |
| PARKEN Sport Enterta |
| LIFEWAY FOODS |
PARKEN Sport and LIFEWAY FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and LIFEWAY FOODS
The main advantage of trading using opposite PARKEN Sport and LIFEWAY FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, LIFEWAY FOODS 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 LIFEWAY FOODS will offset losses from the drop in LIFEWAY FOODS's long position.| PARKEN Sport vs. Choice Hotels International | PARKEN Sport vs. SOUTHWEST AIRLINES | PARKEN Sport vs. DALATA HOTEL | PARKEN Sport vs. Playa Hotels Resorts |
| LIFEWAY FOODS vs. TOTAL GABON | LIFEWAY FOODS vs. Walgreens Boots Alliance | LIFEWAY FOODS vs. Peak Resources Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges |