Correlation Between PARKEN Sport and Apple
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Apple 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 PARKEN Sport and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKEN Sport Entertainment and Apple Inc, you can compare the effects of market volatilities on PARKEN Sport and Apple 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 PARKEN Sport with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Apple.
Diversification Opportunities for PARKEN Sport and Apple
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PARKEN and Apple is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and PARKEN Sport 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 PARKEN Sport Entertainment are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Apple go up and down completely randomly.
Pair Corralation between PARKEN Sport and Apple
Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to generate 0.8 times more return on investment than Apple. However, PARKEN Sport Entertainment is 1.26 times less risky than Apple. It trades about -0.05 of its potential returns per unit of risk. Apple Inc is currently generating about -0.13 per unit of risk. If you would invest 12,550 in PARKEN Sport Entertainment on January 20, 2024 and sell it today you would lose (350.00) from holding PARKEN Sport Entertainment or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. Apple Inc
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Apple Inc |
PARKEN Sport and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Apple
The main advantage of trading using opposite PARKEN Sport and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT AS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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