Correlation Between PARKEN Sport and ALBIS LEASING

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

Diversification Opportunities for PARKEN Sport and ALBIS LEASING

0.56

Correlation Coefficient

PARKEN Sport  ALBIS LEASING

Very weak diversification

The 3 months correlation between PARKEN and ALBIS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and ALBIS LEASING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBIS LEASING AG 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 ALBIS LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBIS LEASING AG has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and ALBIS LEASING go up and down completely randomly.

Pair Corralation between PARKEN Sport and ALBIS LEASING

Assuming the 90 days horizon PARKEN Sport is expected to generate 1.77 times less return on investment than ALBIS LEASING. In addition to that, PARKEN Sport is 2.41 times more volatile than ALBIS LEASING AG. It trades about 0.05 of its total potential returns per unit of risk. ALBIS LEASING AG is currently generating about 0.2 per unit of volatility. If you would invest  248.00  in ALBIS LEASING AG on September 4, 2024 and sell it today you would earn a total of  30.00  from holding ALBIS LEASING AG or generate 12.1% return on investment over 90 days.

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

PARKEN Sport Entertainment  vs.  ALBIS LEASING AG

PARKEN Sport Enterta

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PARKEN Sport Entertainment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PARKEN Sport may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ALBIS LEASING AG

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALBIS LEASING AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, ALBIS LEASING may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PARKEN Sport and ALBIS LEASING

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

The idea behind PARKEN Sport Entertainment and ALBIS LEASING AG 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.