Correlation Between STMICROELECTRONICS and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both STMICROELECTRONICS and PARKEN Sport 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 STMICROELECTRONICS and PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMICROELECTRONICS and PARKEN Sport Entertainment, you can compare the effects of market volatilities on STMICROELECTRONICS and PARKEN Sport 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 STMICROELECTRONICS with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and PARKEN Sport.
Diversification Opportunities for STMICROELECTRONICS and PARKEN Sport
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STMICROELECTRONICS and PARKEN is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta and STMICROELECTRONICS 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 STMICROELECTRONICS are associated (or correlated) with PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and PARKEN Sport go up and down completely randomly.
Pair Corralation between STMICROELECTRONICS and PARKEN Sport
Assuming the 90 days trading horizon STMICROELECTRONICS is expected to under-perform the PARKEN Sport. But the stock apears to be less risky and, when comparing its historical volatility, STMICROELECTRONICS is 2.73 times less risky than PARKEN Sport. The stock trades about -0.03 of its potential returns per unit of risk. The PARKEN Sport Entertainment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 437.00 in PARKEN Sport Entertainment on October 14, 2024 and sell it today you would earn a total of 1,358 from holding PARKEN Sport Entertainment or generate 310.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMICROELECTRONICS vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| STMICROELECTRONICS |
| PARKEN Sport Enterta |
STMICROELECTRONICS and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMICROELECTRONICS and PARKEN Sport
The main advantage of trading using opposite STMICROELECTRONICS and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| STMICROELECTRONICS vs. MAGNUM MINING EXP | STMICROELECTRONICS vs. ARDAGH METAL PACDL 0001 | STMICROELECTRONICS vs. De Grey Mining | STMICROELECTRONICS vs. Western Copper and |
| PARKEN Sport vs. Wayside Technology Group | PARKEN Sport vs. MACOM Technology Solutions | PARKEN Sport vs. STMICROELECTRONICS | PARKEN Sport vs. CONAGRA FOODS |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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