Correlation Between PARKEN Sport and BankInvest Optima
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and BankInvest Optima 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 BankInvest Optima 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 BankInvest Optima 30, you can compare the effects of market volatilities on PARKEN Sport and BankInvest Optima 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 BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and BankInvest Optima.
Diversification Opportunities for PARKEN Sport and BankInvest Optima
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PARKEN and BankInvest is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and BankInvest Optima 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima 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 BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and BankInvest Optima go up and down completely randomly.
Pair Corralation between PARKEN Sport and BankInvest Optima
Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to generate 7.09 times more return on investment than BankInvest Optima. However, PARKEN Sport is 7.09 times more volatile than BankInvest Optima 30. It trades about 0.13 of its potential returns per unit of risk. BankInvest Optima 30 is currently generating about 0.01 per unit of risk. If you would invest 12,100 in PARKEN Sport Entertainment on November 1, 2024 and sell it today you would earn a total of 1,300 from holding PARKEN Sport Entertainment or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. BankInvest Optima 30
Performance |
| Timeline |
| PARKEN Sport Enterta |
| BankInvest Optima |
PARKEN Sport and BankInvest Optima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and BankInvest Optima
The main advantage of trading using opposite PARKEN Sport and BankInvest Optima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, BankInvest Optima 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 BankInvest Optima will offset losses from the drop in BankInvest Optima's long position.| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT AS |
| BankInvest Optima vs. Netcompany Group AS | BankInvest Optima vs. cBrain AS | BankInvest Optima vs. ALK Abell AS | BankInvest Optima vs. Green Hydrogen Systems |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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