Correlation Between PARKEN Sport and Scandinavian Investment
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Scandinavian Investment 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 Scandinavian Investment 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 Scandinavian Investment Group, you can compare the effects of market volatilities on PARKEN Sport and Scandinavian Investment 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 Scandinavian Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Scandinavian Investment.
Diversification Opportunities for PARKEN Sport and Scandinavian Investment
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PARKEN and Scandinavian is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Scandinavian Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Investment 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 Scandinavian Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Investment has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Scandinavian Investment go up and down completely randomly.
Pair Corralation between PARKEN Sport and Scandinavian Investment
Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to under-perform the Scandinavian Investment. But the stock apears to be less risky and, when comparing its historical volatility, PARKEN Sport Entertainment is 1.16 times less risky than Scandinavian Investment. The stock trades about -0.02 of its potential returns per unit of risk. The Scandinavian Investment Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 320.00 in Scandinavian Investment Group on September 2, 2024 and sell it today you would earn a total of 20.00 from holding Scandinavian Investment Group or generate 6.25% 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. Scandinavian Investment Group
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Scandinavian Investment |
PARKEN Sport and Scandinavian Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Scandinavian Investment
The main advantage of trading using opposite PARKEN Sport and Scandinavian Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Scandinavian Investment 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 Scandinavian Investment will offset losses from the drop in Scandinavian Investment's long position.| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT AS |
| Scandinavian Investment vs. North Media AS | Scandinavian Investment vs. Rovsing AS | Scandinavian Investment vs. Alm Brand | Scandinavian Investment vs. SKAKO 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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