Correlation Between NKT AS and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both NKT AS and PARKEN Sport 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 NKT AS and PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NKT AS and PARKEN Sport Entertainment, you can compare the effects of market volatilities on NKT AS and PARKEN Sport 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 NKT AS with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of NKT AS and PARKEN Sport.
Diversification Opportunities for NKT AS and PARKEN Sport
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NKT and PARKEN is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NKT AS and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta and NKT AS 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 NKT AS are associated (or correlated) with PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of NKT AS i.e., NKT AS and PARKEN Sport go up and down completely randomly.
Pair Corralation between NKT AS and PARKEN Sport
Assuming the 90 days trading horizon NKT AS is expected to generate 0.9 times more return on investment than PARKEN Sport. However, NKT AS is 1.11 times less risky than PARKEN Sport. It trades about 0.07 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about -0.01 per unit of risk. If you would invest 41,500 in NKT AS on August 25, 2024 and sell it today you would earn a total of 14,100 from holding NKT AS or generate 33.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NKT AS vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| NKT AS |
| PARKEN Sport Enterta |
NKT AS and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NKT AS and PARKEN Sport
The main advantage of trading using opposite NKT AS and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NKT AS position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| NKT AS vs. FLSmidth Co | NKT AS vs. GN Store Nord | NKT AS vs. DSV Panalpina AS | NKT AS vs. ROCKWOOL International AS |
| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT AS |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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