Correlation Between PARKEN Sport and US FOODS
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and US 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 US 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 US FOODS HOLDING, you can compare the effects of market volatilities on PARKEN Sport and US 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 US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and US FOODS.
Diversification Opportunities for PARKEN Sport and US FOODS
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PARKEN and UFH is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and US FOODS HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US FOODS HOLDING 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 US FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US FOODS HOLDING has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and US FOODS go up and down completely randomly.
Pair Corralation between PARKEN Sport and US FOODS
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to under-perform the US FOODS. But the stock apears to be less risky and, when comparing its historical volatility, PARKEN Sport Entertainment is 1.15 times less risky than US FOODS. The stock trades about -0.01 of its potential returns per unit of risk. The US FOODS HOLDING is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 5,650 in US FOODS HOLDING on September 1, 2024 and sell it today you would earn a total of 1,050 from holding US FOODS HOLDING or generate 18.58% 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. US FOODS HOLDING
Performance |
| Timeline |
| PARKEN Sport Enterta |
| US FOODS HOLDING |
PARKEN Sport and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and US FOODS
The main advantage of trading using opposite PARKEN Sport and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, US 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 US FOODS will offset losses from the drop in US FOODS's long position.| PARKEN Sport vs. Netflix | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. NMI Holdings |
| US FOODS vs. OAKTRSPECLENDNEW | US FOODS vs. Regions Financial | US FOODS vs. Cardinal Health | US FOODS vs. Bausch Health Companies |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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