Correlation Between PARKEN Sport and Great Portland

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

Diversification Opportunities for PARKEN Sport and Great Portland

-0.63

Correlation Coefficient

PARKEN Sport  Great Portland

Excellent diversification

The 3 months correlation between PARKEN and Great is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Great Portland Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Portland Estates 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 Great Portland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Portland Estates has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Great Portland go up and down completely randomly.

Pair Corralation between PARKEN Sport and Great Portland

Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.67 times more return on investment than Great Portland. However, PARKEN Sport is 1.67 times more volatile than Great Portland Estates. It trades about 0.08 of its potential returns per unit of risk. Great Portland Estates is currently generating about -0.2 per unit of risk. If you would invest  1,510  in PARKEN Sport Entertainment on September 26, 2024 and sell it today you would earn a total of  170.00  from holding PARKEN Sport Entertainment or generate 11.26% return on investment over 90 days.

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

PARKEN Sport Entertainment  vs.  Great Portland Estates

PARKEN Sport Enterta

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PARKEN Sport Entertainment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PARKEN Sport may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Great Portland Estates

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Great Portland Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PARKEN Sport and Great Portland

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

The idea behind PARKEN Sport Entertainment and Great Portland Estates 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.