Correlation Between PARKEN Sport and Companhia
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Companhia 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 Companhia 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 Companhia de Saneamento, you can compare the effects of market volatilities on PARKEN Sport and Companhia 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 Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Companhia.
Diversification Opportunities for PARKEN Sport and Companhia
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PARKEN and Companhia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Companhia de Saneamento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia de Saneamento 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 Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia de Saneamento has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Companhia go up and down completely randomly.
Pair Corralation between PARKEN Sport and Companhia
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.57 times more return on investment than Companhia. However, PARKEN Sport is 1.57 times more volatile than Companhia de Saneamento. It trades about 0.04 of its potential returns per unit of risk. Companhia de Saneamento is currently generating about -0.01 per unit of risk. If you would invest 1,745 in PARKEN Sport Entertainment on October 15, 2024 and sell it today you would earn a total of 20.00 from holding PARKEN Sport Entertainment or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. Companhia de Saneamento
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Companhia de Saneamento |
PARKEN Sport and Companhia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Companhia
The main advantage of trading using opposite PARKEN Sport and Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Companhia 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 Companhia will offset losses from the drop in Companhia's long position.| PARKEN Sport vs. Bio Techne Corp | PARKEN Sport vs. THORNEY TECHS LTD | PARKEN Sport vs. Sunny Optical Technology | PARKEN Sport vs. AAC TECHNOLOGHLDGADR |
| Companhia vs. TITANIUM TRANSPORTGROUP | Companhia vs. Transport International Holdings | Companhia vs. PARKEN Sport Entertainment | Companhia vs. JD SPORTS FASH |
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.
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