Correlation Between Park Ohio and Dividend

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

By analyzing existing cross correlation between Park Ohio Holdings and Dividend 15 Split, you can compare the effects of market volatilities on Park Ohio and Dividend 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 Ohio with a short position of Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ohio and Dividend.

Diversification Opportunities for Park Ohio and Dividend

-0.27

Correlation Coefficient

Park Ohio  Dividend

Very good diversification

The 3 months correlation between Park and Dividend is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio Holdings and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split and Park Ohio 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 Ohio Holdings are associated (or correlated) with Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of Park Ohio i.e., Park Ohio and Dividend go up and down completely randomly.

Pair Corralation between Park Ohio and Dividend

Given the investment horizon of 90 days Park Ohio is expected to generate 2.9 times less return on investment than Dividend. In addition to that, Park Ohio is 2.72 times more volatile than Dividend 15 Split. It trades about 0.01 of its total potential returns per unit of risk. Dividend 15 Split is currently generating about 0.12 per unit of volatility. If you would invest  276.00  in Dividend 15 Split on October 9, 2024 and sell it today you would earn a total of  82.00  from holding Dividend 15 Split or generate 29.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Park Ohio Holdings  vs.  Dividend 15 Split

Park Ohio Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Park Ohio Holdings 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 fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Dividend 15 Split

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Dividend may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Park Ohio and Dividend

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

The idea behind Park Ohio Holdings and Dividend 15 Split 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.