Correlation Between SinoMedia Holding and PARKEN Sport

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

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

Diversification Opportunities for SinoMedia Holding and PARKEN Sport

0.08

Correlation Coefficient

SinoMedia Holding  PARKEN Sport

Significant diversification

The 3 months correlation between SinoMedia and PARKEN is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SinoMedia Holding Limited 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 SinoMedia Holding 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 SinoMedia Holding Limited 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 SinoMedia Holding i.e., SinoMedia Holding and PARKEN Sport go up and down completely randomly.

Pair Corralation between SinoMedia Holding and PARKEN Sport

Assuming the 90 days horizon SinoMedia Holding is expected to generate 3.04 times less return on investment than PARKEN Sport. In addition to that, SinoMedia Holding is 2.06 times more volatile than PARKEN Sport Entertainment. It trades about 0.04 of its total potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.27 per unit of volatility. 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SinoMedia Holding Limited  vs.  PARKEN Sport Entertainment

SinoMedia Holding

Risk-Adjusted Performance

Weak

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

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 SinoMedia Holding and PARKEN Sport

The main advantage of trading using opposite SinoMedia Holding and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SinoMedia Holding 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 SinoMedia Holding Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.