Correlation Between PARKEN Sport and Sporttotal
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Sporttotal 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 Sporttotal 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 Sporttotal AG, you can compare the effects of market volatilities on PARKEN Sport and Sporttotal 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 Sporttotal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Sporttotal.
Diversification Opportunities for PARKEN Sport and Sporttotal
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PARKEN and Sporttotal is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Sporttotal AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporttotal AG 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 Sporttotal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporttotal AG has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Sporttotal go up and down completely randomly.
Pair Corralation between PARKEN Sport and Sporttotal
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 0.38 times more return on investment than Sporttotal. However, PARKEN Sport Entertainment is 2.64 times less risky than Sporttotal. It trades about 0.01 of its potential returns per unit of risk. Sporttotal AG is currently generating about -0.35 per unit of risk. If you would invest 1,605 in PARKEN Sport Entertainment on September 1, 2024 and sell it today you would earn a total of 0.00 from holding PARKEN Sport Entertainment or generate 0.0% 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. Sporttotal AG
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Sporttotal AG |
PARKEN Sport and Sporttotal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Sporttotal
The main advantage of trading using opposite PARKEN Sport and Sporttotal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Sporttotal 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 Sporttotal will offset losses from the drop in Sporttotal's long position.| PARKEN Sport vs. Netflix | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. NMI Holdings |
| Sporttotal vs. SIVERS SEMICONDUCTORS AB | Sporttotal vs. Darden Restaurants | Sporttotal vs. Reliance Steel Aluminum | Sporttotal 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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