Correlation Between PARKEN Sport and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on PARKEN Sport and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and STORE ELECTRONIC.
Diversification Opportunities for PARKEN Sport and STORE ELECTRONIC
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PARKEN and STORE is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between PARKEN Sport and STORE ELECTRONIC
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.32 times more return on investment than STORE ELECTRONIC. However, PARKEN Sport is 1.32 times more volatile than STORE ELECTRONIC. It trades about 0.06 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about 0.03 per unit of risk. If you would invest 399.00 in PARKEN Sport Entertainment on September 2, 2024 and sell it today you would earn a total of 1,196 from holding PARKEN Sport Entertainment or generate 299.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. STORE ELECTRONIC
Performance |
| Timeline |
| PARKEN Sport Enterta |
| STORE ELECTRONIC |
PARKEN Sport and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and STORE ELECTRONIC
The main advantage of trading using opposite PARKEN Sport and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| PARKEN Sport vs. DAIRY FARM INTL | PARKEN Sport vs. Chongqing Machinery Electric | PARKEN Sport vs. Nufarm Limited | PARKEN Sport vs. CNVISION MEDIA |
| STORE ELECTRONIC vs. SIVERS SEMICONDUCTORS AB | STORE ELECTRONIC vs. Darden Restaurants | STORE ELECTRONIC vs. Reliance Steel Aluminum | STORE ELECTRONIC vs. Q2M Managementberatung AG |
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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