Correlation Between PARKEN Sport and Carlsberg

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

Diversification Opportunities for PARKEN Sport and Carlsberg

-0.58

Correlation Coefficient

PARKEN Sport  Carlsberg

Excellent diversification

The 3 months correlation between PARKEN and Carlsberg is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg 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 Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Carlsberg go up and down completely randomly.

Pair Corralation between PARKEN Sport and Carlsberg

Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to generate 1.32 times more return on investment than Carlsberg. However, PARKEN Sport is 1.32 times more volatile than Carlsberg AS. It trades about 0.1 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.12 per unit of risk. If you would invest  12,400  in PARKEN Sport Entertainment on October 22, 2024 and sell it today you would earn a total of  1,450  from holding PARKEN Sport Entertainment or generate 11.69% return on investment over 90 days.

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

PARKEN Sport Entertainment  vs.  Carlsberg AS

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

Carlsberg AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlsberg AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with PARKEN Sport and Carlsberg

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

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