Correlation Between PARKEN Sport and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Crédit Agricole 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 Crédit Agricole 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 Crdit Agricole SA, you can compare the effects of market volatilities on PARKEN Sport and Crédit Agricole 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 Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Crédit Agricole.
Diversification Opportunities for PARKEN Sport and Crédit Agricole
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PARKEN and Crédit is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Crdit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crdit Agricole 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 Crédit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crdit Agricole SA has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Crédit Agricole go up and down completely randomly.
Pair Corralation between PARKEN Sport and Crédit Agricole
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 4.21 times more return on investment than Crédit Agricole. However, PARKEN Sport is 4.21 times more volatile than Crdit Agricole SA. It trades about 0.06 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.07 per unit of risk. If you would invest 402.00 in PARKEN Sport Entertainment on September 3, 2024 and sell it today you would earn a total of 1,193 from holding PARKEN Sport Entertainment or generate 296.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. Crdit Agricole SA
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Crdit Agricole SA |
PARKEN Sport and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Crédit Agricole
The main advantage of trading using opposite PARKEN Sport and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Crédit Agricole 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 Crédit Agricole will offset losses from the drop in Crédit Agricole's long position.The idea behind PARKEN Sport Entertainment and Crdit Agricole SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Crédit Agricole vs. Air New Zealand | Crédit Agricole vs. ITALIAN WINE BRANDS | Crédit Agricole vs. Science Applications International | Crédit Agricole vs. MICRONIC MYDATA |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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