Correlation Between Hollywood Bowl and Chiba Bank

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Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Chiba Bank 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 Hollywood Bowl and Chiba Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hollywood Bowl Group and Chiba Bank, you can compare the effects of market volatilities on Hollywood Bowl and Chiba Bank 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 Hollywood Bowl with a short position of Chiba Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Chiba Bank.

Diversification Opportunities for Hollywood Bowl and Chiba Bank

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between Hollywood and Chiba is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Chiba Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank and Hollywood Bowl 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 Hollywood Bowl Group are associated (or correlated) with Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Chiba Bank go up and down completely randomly.

Pair Corralation between Hollywood Bowl and Chiba Bank

Assuming the 90 days horizon Hollywood Bowl is expected to generate 1.71 times less return on investment than Chiba Bank. But when comparing it to its historical volatility, Hollywood Bowl Group is 1.46 times less risky than Chiba Bank. It trades about 0.11 of its potential returns per unit of risk. Chiba Bank is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  755.00  in Chiba Bank on September 12, 2024 and sell it today you would earn a total of  40.00  from holding Chiba Bank or generate 5.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Hollywood Bowl Group  vs.  Chiba Bank

 Performance 
       Timeline  
Hollywood Bowl Group 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Hollywood Bowl Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hollywood Bowl may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Chiba Bank 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Chiba Bank are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Chiba Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hollywood Bowl and Chiba Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hollywood Bowl and Chiba Bank

The main advantage of trading using opposite Hollywood Bowl and Chiba Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Chiba Bank 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 Chiba Bank will offset losses from the drop in Chiba Bank's long position.
The idea behind Hollywood Bowl Group and Chiba Bank 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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