Correlation Between Parkd and Iodm
Can any of the company-specific risk be diversified away by investing in both Parkd and Iodm 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 Parkd and Iodm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parkd and Iodm, you can compare the effects of market volatilities on Parkd and Iodm 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 Parkd with a short position of Iodm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkd and Iodm.
Diversification Opportunities for Parkd and Iodm
Weak diversification
The 3 months correlation between Parkd and Iodm is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Parkd and Iodm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iodm and Parkd 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 Parkd are associated (or correlated) with Iodm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iodm has no effect on the direction of Parkd i.e., Parkd and Iodm go up and down completely randomly.
Pair Corralation between Parkd and Iodm
Assuming the 90 days trading horizon Parkd is expected to generate 0.84 times more return on investment than Iodm. However, Parkd is 1.19 times less risky than Iodm. It trades about -0.09 of its potential returns per unit of risk. Iodm is currently generating about -0.14 per unit of risk. If you would invest 2.30 in Parkd on August 29, 2024 and sell it today you would lose (0.20) from holding Parkd or give up 8.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Parkd vs. Iodm
Performance |
| Timeline |
| Parkd |
| Iodm |
Parkd and Iodm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parkd and Iodm
The main advantage of trading using opposite Parkd and Iodm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkd position performs unexpectedly, Iodm 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 Iodm will offset losses from the drop in Iodm's long position.| Parkd vs. Qbe Insurance Group | Parkd vs. Kkr Credit Income | Parkd vs. Kip McGrath Education | Parkd vs. National Australia Bank |
| Iodm vs. Champion Iron | Iodm vs. Platinum Asset Management | Iodm vs. BKI Investment | Iodm vs. Tombador Iron |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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