Correlation Between Sporttotal and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Sporttotal 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 Sporttotal and PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sporttotal AG and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Sporttotal 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 Sporttotal with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sporttotal and PARKEN Sport.
Diversification Opportunities for Sporttotal and PARKEN Sport
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sporttotal and PARKEN is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sporttotal AG 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 Sporttotal 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 Sporttotal AG 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 Sporttotal i.e., Sporttotal and PARKEN Sport go up and down completely randomly.
Pair Corralation between Sporttotal and PARKEN Sport
Assuming the 90 days trading horizon Sporttotal AG is expected to under-perform the PARKEN Sport. But the stock apears to be less risky and, when comparing its historical volatility, Sporttotal AG is 1.24 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 496.00 in PARKEN Sport Entertainment on December 1, 2024 and sell it today you would earn a total of 1,309 from holding PARKEN Sport Entertainment or generate 263.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sporttotal AG vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Sporttotal AG |
| PARKEN Sport Enterta |
Sporttotal and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sporttotal and PARKEN Sport
The main advantage of trading using opposite Sporttotal and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sporttotal 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.The idea behind Sporttotal AG and PARKEN Sport Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PARKEN Sport vs. US Foods Holding | PARKEN Sport vs. American Eagle Outfitters | PARKEN Sport vs. Semiconductor Manufacturing International | PARKEN Sport vs. COFCO Joycome 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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