Correlation Between PARKEN Sport and Broendbyernes

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

Diversification Opportunities for PARKEN Sport and Broendbyernes

0.22

Correlation Coefficient

PARKEN Sport  Broendbyernes

Modest diversification

The @@bw1eo months correlation between PARKEN and Broendbyernes is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Broendbyernes IF Fodbold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broendbyernes IF Fodbold 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 Broendbyernes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broendbyernes IF Fodbold has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Broendbyernes go up and down completely randomly.

Pair Corralation between PARKEN Sport and Broendbyernes

Assuming the 90 days trading horizon PARKEN Sport is expected to generate 2.61 times less return on investment than Broendbyernes. But when comparing it to its historical volatility, PARKEN Sport Entertainment is 1.21 times less risky than Broendbyernes. It trades about 0.05 of its potential returns per unit of risk. Broendbyernes IF Fodbold is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Broendbyernes IF Fodbold on February 3, 2024 and sell it today you would earn a total of  31.00  from holding Broendbyernes IF Fodbold or generate 68.89% return on investment over 90 days.

Time Period	@@bw1EO Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

PARKEN Sport Entertainment  vs.  Broendbyernes IF Fodbold

PARKEN Sport Enterta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PARKEN Sport Entertainment 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 technical and fundamental indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Broendbyernes IF Fodbold

Risk-Adjusted Performance

4 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Broendbyernes IF Fodbold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Broendbyernes may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with PARKEN Sport and Broendbyernes

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

The idea behind PARKEN Sport Entertainment and Broendbyernes IF Fodbold 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.