Correlation Between PARKEN Sport and IA Invest

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

Diversification Opportunities for PARKEN Sport and IA Invest

0.25

Correlation Coefficient

PARKEN Sport  IA Invest

Modest diversification

The 3 months correlation between PARKEN and IAIACVF is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and IA Invest Advice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Invest Advice 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 IA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Invest Advice has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and IA Invest go up and down completely randomly.

Pair Corralation between PARKEN Sport and IA Invest

Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to generate 1.93 times more return on investment than IA Invest. However, PARKEN Sport is 1.93 times more volatile than IA Invest Advice. It trades about 0.11 of its potential returns per unit of risk. IA Invest Advice is currently generating about -0.04 per unit of risk. If you would invest  12,650  in PARKEN Sport Entertainment on December 25, 2024 and sell it today you would earn a total of  1,400  from holding PARKEN Sport Entertainment or generate 11.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

PARKEN Sport Entertainment  vs.  IA Invest Advice

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 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, PARKEN Sport may actually be approaching a critical reversion point that can send shares even higher in April 2025.

IA Invest Advice

Risk-Adjusted Performance

Very Weak

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

Pair Trading with PARKEN Sport and IA Invest

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

The idea behind PARKEN Sport Entertainment and IA Invest Advice 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.

Check out your portfolio center.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.