Correlation Between Alefarm Brewing and PARKEN Sport

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

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

Diversification Opportunities for Alefarm Brewing and PARKEN Sport

-0.72

Correlation Coefficient

Alefarm Brewing  PARKEN Sport

Pay attention - limited upside

The 3 months correlation between Alefarm and PARKEN is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alefarm Brewing AS 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 Alefarm Brewing 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 Alefarm Brewing AS 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 Alefarm Brewing i.e., Alefarm Brewing and PARKEN Sport go up and down completely randomly.

Pair Corralation between Alefarm Brewing and PARKEN Sport

Assuming the 90 days trading horizon Alefarm Brewing AS is expected to under-perform the PARKEN Sport. In addition to that, Alefarm Brewing is 2.5 times more volatile than PARKEN Sport Entertainment. It trades about -0.05 of its total potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.32 per unit of volatility. If you would invest  13,400  in PARKEN Sport Entertainment on April 25, 2025 and sell it today you would earn a total of  4,500  from holding PARKEN Sport Entertainment or generate 33.58% return on investment over 90 days.

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

Alefarm Brewing AS  vs.  PARKEN Sport Entertainment

Alefarm Brewing AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alefarm Brewing AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, PARKEN Sport sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alefarm Brewing and PARKEN Sport

The main advantage of trading using opposite Alefarm Brewing and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alefarm Brewing 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 Alefarm Brewing AS 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..