Correlation Between COFCO Joycome and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Hollywood Bowl 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 COFCO Joycome and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and Hollywood Bowl Group, you can compare the effects of market volatilities on COFCO Joycome and Hollywood Bowl 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 COFCO Joycome with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Hollywood Bowl.
Diversification Opportunities for COFCO Joycome and Hollywood Bowl
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COFCO and Hollywood is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Hollywood Bowl go up and down completely randomly.
Pair Corralation between COFCO Joycome and Hollywood Bowl
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the Hollywood Bowl. In addition to that, COFCO Joycome is 1.86 times more volatile than Hollywood Bowl Group. It trades about -0.01 of its total potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.04 per unit of volatility. If you would invest 246.00 in Hollywood Bowl Group on November 5, 2024 and sell it today you would earn a total of 76.00 from holding Hollywood Bowl Group or generate 30.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. Hollywood Bowl Group
Performance |
| Timeline |
| COFCO Joycome Foods |
| Hollywood Bowl Group |
COFCO Joycome and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and Hollywood Bowl
The main advantage of trading using opposite COFCO Joycome and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| COFCO Joycome vs. Aegean Airlines SA | COFCO Joycome vs. AEGEAN AIRLINES | COFCO Joycome vs. ecotel communication ag | COFCO Joycome vs. INTERNET INJPADR 1 |
| Hollywood Bowl vs. SLR Investment Corp | Hollywood Bowl vs. AGNC INVESTMENT | Hollywood Bowl vs. ITALIAN WINE BRANDS | Hollywood Bowl vs. BRIT AMER TOBACCO |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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