Correlation Between Enter Air and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Enter Air 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 Enter Air and PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enter Air SA and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Enter Air 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 Enter Air with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and PARKEN Sport.
Diversification Opportunities for Enter Air and PARKEN Sport
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Enter and PARKEN is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA 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 Enter Air 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 Enter Air SA 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 Enter Air i.e., Enter Air and PARKEN Sport go up and down completely randomly.
Pair Corralation between Enter Air and PARKEN Sport
Assuming the 90 days trading horizon Enter Air SA is expected to generate 0.82 times more return on investment than PARKEN Sport. However, Enter Air SA is 1.22 times less risky than PARKEN Sport. It trades about 0.15 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.07 per unit of risk. If you would invest 1,124 in Enter Air SA on December 29, 2024 and sell it today you would earn a total of 186.00 from holding Enter Air SA or generate 16.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Enter Air SA vs. PARKEN Sport Entertainment
Performance |
Timeline |
Enter Air SA |
Risk-Adjusted Performance
Good
Weak | Strong |
PARKEN Sport Enterta |
Enter Air and PARKEN Sport Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enter Air and PARKEN Sport
The main advantage of trading using opposite Enter Air and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air 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.Enter Air vs. AFRICAN MEDIA ENT | Enter Air vs. Seven West Media | Enter Air vs. Media and Games | Enter Air vs. BOSTON BEER A |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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