Correlation Between PARKEN Sport and Deutsche Post

Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Deutsche Post 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 Deutsche Post 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 Deutsche Post AG, you can compare the effects of market volatilities on PARKEN Sport and Deutsche Post 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 Deutsche Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Deutsche Post.

Diversification Opportunities for PARKEN Sport and Deutsche Post

0.03

Correlation Coefficient

PARKEN Sport  Deutsche Post

Significant diversification

The 3 months correlation between PARKEN and Deutsche is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Deutsche Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Post AG 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 Deutsche Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Post AG has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Deutsche Post go up and down completely randomly.

Pair Corralation between PARKEN Sport and Deutsche Post

Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.43 times more return on investment than Deutsche Post. However, PARKEN Sport is 1.43 times more volatile than Deutsche Post AG. It trades about 0.15 of its potential returns per unit of risk. Deutsche Post AG is currently generating about -0.14 per unit of risk. If you would invest  1,620  in PARKEN Sport Entertainment on October 5, 2024 and sell it today you would earn a total of  95.00  from holding PARKEN Sport Entertainment or generate 5.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PARKEN Sport Entertainment  vs.  Deutsche Post AG

PARKEN Sport Enterta

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days PARKEN Sport Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, PARKEN Sport reported solid returns over the last few months and may actually be approaching a breakup point.

Deutsche Post AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Post AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with PARKEN Sport and Deutsche Post

The main advantage of trading using opposite PARKEN Sport and Deutsche Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Deutsche Post 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 Deutsche Post will offset losses from the drop in Deutsche Post's long position.

The idea behind PARKEN Sport Entertainment and Deutsche Post AG 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.