Correlation Between Dillards and Parkson Retail
Can any of the company-specific risk be diversified away by investing in both Dillards and Parkson Retail 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 Dillards and Parkson Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dillards and Parkson Retail Group, you can compare the effects of market volatilities on Dillards and Parkson Retail 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 Dillards with a short position of Parkson Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dillards and Parkson Retail.
Diversification Opportunities for Dillards and Parkson Retail
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dillards and Parkson is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dillards and Parkson Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parkson Retail Group and Dillards 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 Dillards are associated (or correlated) with Parkson Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parkson Retail Group has no effect on the direction of Dillards i.e., Dillards and Parkson Retail go up and down completely randomly.
Pair Corralation between Dillards and Parkson Retail
Assuming the 90 days trading horizon Dillards is expected to under-perform the Parkson Retail. But the stock apears to be less risky and, when comparing its historical volatility, Dillards is 5.15 times less risky than Parkson Retail. The stock trades about -0.22 of its potential returns per unit of risk. The Parkson Retail Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.75 in Parkson Retail Group on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Parkson Retail Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dillards vs. Parkson Retail Group
Performance |
| Timeline |
| Dillards |
| Parkson Retail Group |
Dillards and Parkson Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dillards and Parkson Retail
The main advantage of trading using opposite Dillards and Parkson Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dillards position performs unexpectedly, Parkson Retail 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 Parkson Retail will offset losses from the drop in Parkson Retail's long position.| Dillards vs. CITY OFFICE REIT | Dillards vs. Silicon Motion Technology | Dillards vs. Siamgas And Petrochemicals | Dillards vs. Sekisui Chemical Co |
| Parkson Retail vs. COSTCO WHOLESALE CDR | Parkson Retail vs. Pebblebrook Hotel Trust | Parkson Retail vs. PICKN PAY STORES | Parkson Retail vs. COVIVIO HOTELS INH |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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