Correlation Between VIAPLAY GROUP and Park Aerospace

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

By analyzing existing cross correlation between VIAPLAY GROUP AB and Park Aerospace Corp, you can compare the effects of market volatilities on VIAPLAY GROUP and Park Aerospace 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 VIAPLAY GROUP with a short position of Park Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIAPLAY GROUP and Park Aerospace.

Diversification Opportunities for VIAPLAY GROUP and Park Aerospace

-0.28

Correlation Coefficient

VIAPLAY GROUP  Park Aerospace

Very good diversification

The 3 months correlation between VIAPLAY and Park is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding VIAPLAY GROUP AB and Park Aerospace Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Aerospace Corp and VIAPLAY GROUP 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 VIAPLAY GROUP AB are associated (or correlated) with Park Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Aerospace Corp has no effect on the direction of VIAPLAY GROUP i.e., VIAPLAY GROUP and Park Aerospace go up and down completely randomly.

Pair Corralation between VIAPLAY GROUP and Park Aerospace

Assuming the 90 days horizon VIAPLAY GROUP AB is expected to under-perform the Park Aerospace. In addition to that, VIAPLAY GROUP is 2.52 times more volatile than Park Aerospace Corp. It trades about -0.04 of its total potential returns per unit of risk. Park Aerospace Corp is currently generating about 0.01 per unit of volatility. If you would invest  1,407  in Park Aerospace Corp on October 25, 2024 and sell it today you would earn a total of  3.00  from holding Park Aerospace Corp or generate 0.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.44%
Values	Daily Returns

VIAPLAY GROUP AB  vs.  Park Aerospace Corp

VIAPLAY GROUP AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIAPLAY GROUP AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

Park Aerospace Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Park Aerospace Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Park Aerospace may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with VIAPLAY GROUP and Park Aerospace

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

The idea behind VIAPLAY GROUP AB and Park Aerospace Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.