Correlation Between PARKEN Sport and MetLife
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and MetLife 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 MetLife 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 MetLife, you can compare the effects of market volatilities on PARKEN Sport and MetLife 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 MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and MetLife.
Diversification Opportunities for PARKEN Sport and MetLife
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PARKEN and MetLife is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife 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 MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and MetLife go up and down completely randomly.
Pair Corralation between PARKEN Sport and MetLife
Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to generate 1.57 times more return on investment than MetLife. However, PARKEN Sport is 1.57 times more volatile than MetLife. It trades about -0.09 of its potential returns per unit of risk. MetLife is currently generating about -0.27 per unit of risk. If you would invest 12,300 in PARKEN Sport Entertainment on January 20, 2024 and sell it today you would lose (300.00) from holding PARKEN Sport Entertainment or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. MetLife
Performance |
| Timeline |
| PARKEN Sport Enterta |
| MetLife |
PARKEN Sport and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and MetLife
The main advantage of trading using opposite PARKEN Sport and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT AS |
| MetLife vs. MetLife Preferred Stock | MetLife vs. American Equity Investment | MetLife vs. National Western Life |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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