Correlation Between Park Electrochemical and American Copper
Can any of the company-specific risk be diversified away by investing in both Park Electrochemical and American Copper 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 Park Electrochemical and American Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Electrochemical and American Copper Development, you can compare the effects of market volatilities on Park Electrochemical and American Copper 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 Park Electrochemical with a short position of American Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Electrochemical and American Copper.
Diversification Opportunities for Park Electrochemical and American Copper
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Park and American is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Park Electrochemical and American Copper Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Copper Deve and Park Electrochemical 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 Park Electrochemical are associated (or correlated) with American Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Copper Deve has no effect on the direction of Park Electrochemical i.e., Park Electrochemical and American Copper go up and down completely randomly.
Pair Corralation between Park Electrochemical and American Copper
Considering the 90-day investment horizon Park Electrochemical is expected to generate 0.13 times more return on investment than American Copper. However, Park Electrochemical is 7.49 times less risky than American Copper. It trades about 0.03 of its potential returns per unit of risk. American Copper Development is currently generating about 0.0 per unit of risk. If you would invest 1,435 in Park Electrochemical on November 4, 2024 and sell it today you would earn a total of 14.00 from holding Park Electrochemical or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Park Electrochemical vs. American Copper Development
Performance |
| Timeline |
| Park Electrochemical |
| American Copper Deve |
Park Electrochemical and American Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Electrochemical and American Copper
The main advantage of trading using opposite Park Electrochemical and American Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Electrochemical position performs unexpectedly, American Copper 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 American Copper will offset losses from the drop in American Copper's long position.| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
| American Copper vs. EastGroup Properties | American Copper vs. National CineMedia | American Copper vs. Catalyst Metals Limited | American Copper vs. Fluent Inc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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