Correlation Between PARKEN Sport and Mercedes Benz
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Mercedes Benz 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 Mercedes Benz 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 Mercedes Benz Group AG, you can compare the effects of market volatilities on PARKEN Sport and Mercedes Benz 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 Mercedes Benz. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Mercedes Benz.
Diversification Opportunities for PARKEN Sport and Mercedes Benz
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PARKEN and Mercedes is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Mercedes Benz Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercedes Benz Group 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 Mercedes Benz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercedes Benz Group has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Mercedes Benz go up and down completely randomly.
Pair Corralation between PARKEN Sport and Mercedes Benz
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.31 times more return on investment than Mercedes Benz. However, PARKEN Sport is 1.31 times more volatile than Mercedes Benz Group AG. It trades about -0.02 of its potential returns per unit of risk. Mercedes Benz Group AG is currently generating about -0.04 per unit of risk. If you would invest 1,600 in PARKEN Sport Entertainment on September 8, 2024 and sell it today you would lose (20.00) from holding PARKEN Sport Entertainment or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. Mercedes Benz Group AG
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Mercedes Benz Group |
PARKEN Sport and Mercedes Benz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Mercedes Benz
The main advantage of trading using opposite PARKEN Sport and Mercedes Benz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Mercedes Benz 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 Mercedes Benz will offset losses from the drop in Mercedes Benz's long position.| PARKEN Sport vs. The Home Depot | PARKEN Sport vs. UET United Electronic | PARKEN Sport vs. STORE ELECTRONIC | PARKEN Sport vs. AOI Electronics Co |
| Mercedes Benz vs. CSL LTD SPONADR | Mercedes Benz vs. CSL Limited | Mercedes Benz vs. Moderna | Mercedes Benz vs. BioNTech SE |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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