Correlation Between Mirvac and PARKEN Sport

Can any of the company-specific risk be diversified away by investing in both Mirvac 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 Mirvac and PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mirvac Group and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Mirvac 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 Mirvac with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirvac and PARKEN Sport.

Diversification Opportunities for Mirvac and PARKEN Sport

-0.71

Correlation Coefficient

Mirvac  PARKEN Sport

Pay attention - limited upside

The 3 months correlation between Mirvac and PARKEN is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mirvac Group 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 Mirvac 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 Mirvac Group 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 Mirvac i.e., Mirvac and PARKEN Sport go up and down completely randomly.

Pair Corralation between Mirvac and PARKEN Sport

Assuming the 90 days horizon Mirvac Group is expected to under-perform the PARKEN Sport. But the stock apears to be less risky and, when comparing its historical volatility, Mirvac Group is 1.19 times less risky than PARKEN Sport. The stock trades about -0.24 of its potential returns per unit of risk. The PARKEN Sport Entertainment is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,600  in PARKEN Sport Entertainment on September 21, 2024 and sell it today you would earn a total of  105.00  from holding PARKEN Sport Entertainment or generate 6.56% return on investment over 90 days.

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

Mirvac Group  vs.  PARKEN Sport Entertainment

Mirvac Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirvac Group 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 basic indicators 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.

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 uncertain basic indicators, PARKEN Sport reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mirvac and PARKEN Sport

The main advantage of trading using opposite Mirvac and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirvac 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.

The idea behind Mirvac Group and PARKEN Sport Entertainment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.