Correlation Between Park National and China Power
Can any of the company-specific risk be diversified away by investing in both Park National and China Power 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 National and China Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park National and China Power Equipment, you can compare the effects of market volatilities on Park National and China Power 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 National with a short position of China Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park National and China Power.
Diversification Opportunities for Park National and China Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Park and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Park National and China Power Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Power Equipment and Park National 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 National are associated (or correlated) with China Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Power Equipment has no effect on the direction of Park National i.e., Park National and China Power go up and down completely randomly.
Pair Corralation between Park National and China Power
If you would invest 0.52 in China Power Equipment on November 4, 2024 and sell it today you would earn a total of 0.00 from holding China Power Equipment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Park National vs. China Power Equipment
Performance |
| Timeline |
| Park National |
| China Power Equipment |
Park National and China Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park National and China Power
The main advantage of trading using opposite Park National and China Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park National position performs unexpectedly, China Power 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 China Power will offset losses from the drop in China Power's long position.| Park National vs. US Bancorp | Park National vs. Truist Financial Corp | Park National vs. Fifth Third Bancorp | Park National vs. KeyCorp |
| China Power vs. Wheels Up Experience | China Power vs. Mesa Air Group | China Power vs. Garmin | China Power vs. EvoAir Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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