Correlation Between MOVIE GAMES and PARKEN Sport

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

By analyzing existing cross correlation between MOVIE GAMES SA and PARKEN Sport Entertainment, you can compare the effects of market volatilities on MOVIE GAMES and PARKEN Sport 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 MOVIE GAMES with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and PARKEN Sport.

Diversification Opportunities for MOVIE GAMES and PARKEN Sport

-0.4

Correlation Coefficient

MOVIE GAMES  PARKEN Sport

Very good diversification

The 3 months correlation between MOVIE and PARKEN is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta and MOVIE GAMES 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 MOVIE GAMES SA are associated (or correlated) with PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and PARKEN Sport go up and down completely randomly.

Pair Corralation between MOVIE GAMES and PARKEN Sport

Assuming the 90 days horizon MOVIE GAMES SA is expected to under-perform the PARKEN Sport. But the stock apears to be less risky and, when comparing its historical volatility, MOVIE GAMES SA is 1.05 times less risky than PARKEN Sport. The stock trades about -0.05 of its potential returns per unit of risk. The PARKEN Sport Entertainment is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,735  in PARKEN Sport Entertainment on April 25, 2025 and sell it today you would earn a total of  715.00  from holding PARKEN Sport Entertainment or generate 41.21% return on investment over 90 days.

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

MOVIE GAMES SA  vs.  PARKEN Sport Entertainment

MOVIE GAMES SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days MOVIE GAMES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MOVIE GAMES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PARKEN Sport Enterta

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PARKEN Sport Entertainment are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PARKEN Sport reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOVIE GAMES and PARKEN Sport

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

The idea behind MOVIE GAMES SA and PARKEN Sport Entertainment 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.