Correlation Between Park Ohio and 918204AR9

Can any of the company-specific risk be diversified away by investing in both Park Ohio and 918204AR9 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 918204AR9 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 V F P, you can compare the effects of market volatilities on Park Ohio and 918204AR9 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 918204AR9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ohio and 918204AR9.

Diversification Opportunities for Park Ohio and 918204AR9

-0.09

Correlation Coefficient

Park Ohio  918204AR9

Good diversification

The 3 months correlation between Park and 918204AR9 is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio Holdings and V F P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 918204AR9 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 918204AR9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 918204AR9 has no effect on the direction of Park Ohio i.e., Park Ohio and 918204AR9 go up and down completely randomly.

Pair Corralation between Park Ohio and 918204AR9

Given the investment horizon of 90 days Park Ohio Holdings is expected to under-perform the 918204AR9. In addition to that, Park Ohio is 1.86 times more volatile than V F P. It trades about -0.56 of its total potential returns per unit of risk. V F P is currently generating about -0.14 per unit of volatility. If you would invest  10,006  in V F P on October 10, 2024 and sell it today you would lose (318.00) from holding V F P or give up 3.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Park Ohio Holdings  vs.  V F P

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.

918204AR9

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in V F P are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, 918204AR9 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Park Ohio and 918204AR9

The main advantage of trading using opposite Park Ohio and 918204AR9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Ohio position performs unexpectedly, 918204AR9 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 918204AR9 will offset losses from the drop in 918204AR9's long position.

The idea behind Park Ohio Holdings and V F P 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.