Correlation Between Park National and Green Planet

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

By analyzing existing cross correlation between Park National and Green Planet Bio, you can compare the effects of market volatilities on Park National and Green Planet 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 National with a short position of Green Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park National and Green Planet.

Diversification Opportunities for Park National and Green Planet

0.1

Correlation Coefficient

Park National  Green Planet

Average diversification

The 3 months correlation between Park and Green is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Park National and Green Planet Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Planet Bio and Park National 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 National are associated (or correlated) with Green Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Planet Bio has no effect on the direction of Park National i.e., Park National and Green Planet go up and down completely randomly.

Pair Corralation between Park National and Green Planet

Considering the 90-day investment horizon Park National is expected to under-perform the Green Planet. But the stock apears to be less risky and, when comparing its historical volatility, Park National is 79.4 times less risky than Green Planet. The stock trades about -0.15 of its potential returns per unit of risk. The Green Planet Bio is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  54.00  in Green Planet Bio on December 17, 2024 and sell it today you would lose (3.00) from holding Green Planet Bio or give up 5.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Park National  vs.  Green Planet Bio

Park National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Park National has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Green Planet Bio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Green Planet Bio are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile essential indicators, Green Planet sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Park National and Green Planet

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

The idea behind Park National and Green Planet Bio 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 Stocks Directory module to find actively traded stocks across global markets.