Correlation Between PARKEN Sport and Lery Seafood

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

Diversification Opportunities for PARKEN Sport and Lery Seafood

-0.04

Correlation Coefficient

PARKEN Sport  Lery Seafood

Good diversification

The 3 months correlation between PARKEN and Lery is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Lery Seafood go up and down completely randomly.

Pair Corralation between PARKEN Sport and Lery Seafood

Assuming the 90 days horizon PARKEN Sport is expected to generate 1.3 times less return on investment than Lery Seafood. But when comparing it to its historical volatility, PARKEN Sport Entertainment is 1.35 times less risky than Lery Seafood. It trades about 0.06 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  89.00  in Lery Seafood Group on October 11, 2024 and sell it today you would earn a total of  329.00  from holding Lery Seafood Group or generate 369.66% return on investment over 90 days.

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

PARKEN Sport Entertainment  vs.  Lery Seafood Group

PARKEN Sport Enterta

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PARKEN Sport Entertainment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, PARKEN Sport reported solid returns over the last few months and may actually be approaching a breakup point.

Lery Seafood Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lery Seafood Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lery Seafood is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PARKEN Sport and Lery Seafood

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

The idea behind PARKEN Sport Entertainment and Lery Seafood Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.