Correlation Between PARKEN Sport and North Media

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

Diversification Opportunities for PARKEN Sport and North Media

-0.16

Correlation Coefficient

PARKEN Sport  North Media

Good diversification

The 3 months correlation between PARKEN and North is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and North Media AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Media 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 North Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Media AS has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and North Media go up and down completely randomly.

Pair Corralation between PARKEN Sport and North Media

Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to generate 0.77 times more return on investment than North Media. However, PARKEN Sport Entertainment is 1.3 times less risky than North Media. It trades about 0.11 of its potential returns per unit of risk. North Media AS is currently generating about -0.18 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PARKEN Sport Entertainment  vs.  North Media 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 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.

North Media AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days North Media AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PARKEN Sport and North Media

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

The idea behind PARKEN Sport Entertainment and North Media 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.