Correlation Between PARKEN Sport and BioPorto
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and BioPorto 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 BioPorto 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 BioPorto, you can compare the effects of market volatilities on PARKEN Sport and BioPorto 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 BioPorto. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and BioPorto.
Diversification Opportunities for PARKEN Sport and BioPorto
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PARKEN and BioPorto is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and BioPorto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioPorto 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 BioPorto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioPorto has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and BioPorto go up and down completely randomly.
Pair Corralation between PARKEN Sport and BioPorto
Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to generate 0.49 times more return on investment than BioPorto. However, PARKEN Sport Entertainment is 2.05 times less risky than BioPorto. It trades about 0.07 of its potential returns per unit of risk. BioPorto is currently generating about -0.01 per unit of risk. If you would invest 6,909 in PARKEN Sport Entertainment on August 29, 2024 and sell it today you would earn a total of 5,141 from holding PARKEN Sport Entertainment or generate 74.41% 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. BioPorto
Performance |
| Timeline |
| PARKEN Sport Enterta |
| BioPorto |
PARKEN Sport and BioPorto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and BioPorto
The main advantage of trading using opposite PARKEN Sport and BioPorto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, BioPorto 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 BioPorto will offset losses from the drop in BioPorto's long position.| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT AS |
| BioPorto vs. Ambu AS | BioPorto vs. Bavarian Nordic | BioPorto vs. Zealand Pharma AS | BioPorto vs. Orphazyme 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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