Correlation Between Park Electrochemical and INTNED

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

By analyzing existing cross correlation between Park Electrochemical and INTNED 14 01 JUL 26, you can compare the effects of market volatilities on Park Electrochemical and INTNED 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 Park Electrochemical with a short position of INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Electrochemical and INTNED.

Diversification Opportunities for Park Electrochemical and INTNED

0.56

Correlation Coefficient

Park Electrochemical  INTNED

Very weak diversification

The 3 months correlation between Park and INTNED is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Park Electrochemical and INTNED 14 01 JUL 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 14 01 and Park Electrochemical 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 Park Electrochemical are associated (or correlated) with INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 14 01 has no effect on the direction of Park Electrochemical i.e., Park Electrochemical and INTNED go up and down completely randomly.

Pair Corralation between Park Electrochemical and INTNED

Considering the 90-day investment horizon Park Electrochemical is expected to generate 0.76 times more return on investment than INTNED. However, Park Electrochemical is 1.32 times less risky than INTNED. It trades about -0.11 of its potential returns per unit of risk. INTNED 14 01 JUL 26 is currently generating about -0.1 per unit of risk. If you would invest  1,509  in Park Electrochemical on October 4, 2024 and sell it today you would lose (71.00) from holding Park Electrochemical or give up 4.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	57.14%
Values	Daily Returns

Park Electrochemical  vs.  INTNED 14 01 JUL 26

Park Electrochemical

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Park Electrochemical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, Park Electrochemical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

INTNED 14 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 14 01 JUL 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Park Electrochemical and INTNED

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

The idea behind Park Electrochemical and INTNED 14 01 JUL 26 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.