Correlation Between PARKEN Sport and Tenaris SA
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Tenaris SA 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 Tenaris SA 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 Tenaris SA, you can compare the effects of market volatilities on PARKEN Sport and Tenaris SA 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 Tenaris SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Tenaris SA.
Diversification Opportunities for PARKEN Sport and Tenaris SA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PARKEN and Tenaris is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Tenaris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaris SA 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 Tenaris SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaris SA has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Tenaris SA go up and down completely randomly.
Pair Corralation between PARKEN Sport and Tenaris SA
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 4.14 times more return on investment than Tenaris SA. However, PARKEN Sport is 4.14 times more volatile than Tenaris SA. It trades about 0.21 of its potential returns per unit of risk. Tenaris SA is currently generating about 0.38 per unit of risk. If you would invest 1,680 in PARKEN Sport Entertainment on October 22, 2024 and sell it today you would earn a total of 165.00 from holding PARKEN Sport Entertainment or generate 9.82% 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. Tenaris SA
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Tenaris SA |
PARKEN Sport and Tenaris SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Tenaris SA
The main advantage of trading using opposite PARKEN Sport and Tenaris SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Tenaris SA 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 Tenaris SA will offset losses from the drop in Tenaris SA's long position.| PARKEN Sport vs. American Eagle Outfitters | PARKEN Sport vs. TRADEDOUBLER AB SK | PARKEN Sport vs. Tencent Music Entertainment | PARKEN Sport vs. RCS MediaGroup SpA |
| Tenaris SA vs. TT Electronics PLC | Tenaris SA vs. AUSNUTRIA DAIRY | Tenaris SA vs. United Natural Foods | Tenaris SA vs. Lifeway Foods |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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