Correlation Between Park Ohio and Zura Bio
Can any of the company-specific risk be diversified away by investing in both Park Ohio and Zura Bio 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 Ohio and Zura Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Ohio Holdings and Zura Bio Limited, you can compare the effects of market volatilities on Park Ohio and Zura Bio 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 Ohio with a short position of Zura Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ohio and Zura Bio.
Diversification Opportunities for Park Ohio and Zura Bio
Good diversification
The 3 months correlation between Park and Zura is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio Holdings and Zura Bio Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zura Bio Limited and Park Ohio 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 Ohio Holdings are associated (or correlated) with Zura Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zura Bio Limited has no effect on the direction of Park Ohio i.e., Park Ohio and Zura Bio go up and down completely randomly.
Pair Corralation between Park Ohio and Zura Bio
Given the investment horizon of 90 days Park Ohio Holdings is expected to generate 0.44 times more return on investment than Zura Bio. However, Park Ohio Holdings is 2.27 times less risky than Zura Bio. It trades about 0.08 of its potential returns per unit of risk. Zura Bio Limited is currently generating about 0.01 per unit of risk. If you would invest 1,512 in Park Ohio Holdings on August 29, 2024 and sell it today you would earn a total of 1,755 from holding Park Ohio Holdings or generate 116.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Ohio Holdings vs. Zura Bio Limited
Performance |
| Timeline |
| Park Ohio Holdings |
| Zura Bio Limited |
Park Ohio and Zura Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Ohio and Zura Bio
The main advantage of trading using opposite Park Ohio and Zura Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Ohio position performs unexpectedly, Zura Bio 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 Zura Bio will offset losses from the drop in Zura Bio's long position.| Park Ohio vs. Aquagold International | Park Ohio vs. Morningstar Unconstrained Allocation | Park Ohio vs. High Yield Municipal Fund | Park Ohio vs. Thrivent High Yield |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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