Correlation Between PARKEN Sport and NKT AS
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and NKT AS 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 NKT AS 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 NKT AS, you can compare the effects of market volatilities on PARKEN Sport and NKT AS 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 NKT AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and NKT AS.
Diversification Opportunities for PARKEN Sport and NKT AS
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between PARKEN and NKT is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and NKT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NKT AS 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 NKT AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NKT AS has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and NKT AS go up and down completely randomly.
Pair Corralation between PARKEN Sport and NKT AS
Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to generate 1.42 times more return on investment than NKT AS. However, PARKEN Sport is 1.42 times more volatile than NKT AS. It trades about 0.02 of its potential returns per unit of risk. NKT AS is currently generating about -0.13 per unit of risk. If you would invest 11,850 in PARKEN Sport Entertainment on August 29, 2024 and sell it today you would earn a total of 200.00 from holding PARKEN Sport Entertainment or generate 1.69% 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. NKT AS
Performance |
| Timeline |
| PARKEN Sport Enterta |
| NKT AS |
PARKEN Sport and NKT AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and NKT AS
The main advantage of trading using opposite PARKEN Sport and NKT AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, NKT AS 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 NKT AS will offset losses from the drop in NKT AS's long position.| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT AS |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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