Correlation Between PARKEN Sport and Bactiquant

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

Diversification Opportunities for PARKEN Sport and Bactiquant

0.2

Correlation Coefficient

PARKEN Sport  Bactiquant

Modest diversification

The 3 months correlation between PARKEN and Bactiquant is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Bactiquant AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bactiquant AS 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 Bactiquant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bactiquant AS has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Bactiquant go up and down completely randomly.

Pair Corralation between PARKEN Sport and Bactiquant

Assuming the 90 days trading horizon PARKEN Sport is expected to generate 3.4 times less return on investment than Bactiquant. But when comparing it to its historical volatility, PARKEN Sport Entertainment is 8.46 times less risky than Bactiquant. It trades about 0.12 of its potential returns per unit of risk. Bactiquant AS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  408.00  in Bactiquant AS on December 2, 2024 and sell it today you would lose (32.00) from holding Bactiquant AS or give up 7.84% of portfolio value over 90 days.

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

PARKEN Sport Entertainment  vs.  Bactiquant AS

PARKEN Sport Enterta

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PARKEN Sport Entertainment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, PARKEN Sport sustained solid returns over the last few months and may actually be approaching a breakup point.

Bactiquant AS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bactiquant AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Bactiquant sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PARKEN Sport and Bactiquant

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

The idea behind PARKEN Sport Entertainment and Bactiquant AS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.