Correlation Between Hollywood Bowl and National Retail
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and National Retail 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 National Retail 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 National Retail Properties, you can compare the effects of market volatilities on Hollywood Bowl and National Retail 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 National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and National Retail.
Diversification Opportunities for Hollywood Bowl and National Retail
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hollywood and National is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop 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 National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and National Retail go up and down completely randomly.
Pair Corralation between Hollywood Bowl and National Retail
Assuming the 90 days horizon Hollywood Bowl Group is expected to generate 1.5 times more return on investment than National Retail. However, Hollywood Bowl is 1.5 times more volatile than National Retail Properties. It trades about 0.06 of its potential returns per unit of risk. National Retail Properties is currently generating about 0.02 per unit of risk. If you would invest 223.00 in Hollywood Bowl Group on September 2, 2024 and sell it today you would earn a total of 155.00 from holding Hollywood Bowl Group or generate 69.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. National Retail Properties
Performance |
| Timeline |
| Hollywood Bowl Group |
| National Retail Prop |
Hollywood Bowl and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and National Retail
The main advantage of trading using opposite Hollywood Bowl and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail's long position.| Hollywood Bowl vs. Li Ning Company | Hollywood Bowl vs. Trip Group Limited | Hollywood Bowl vs. Superior Plus Corp | Hollywood Bowl vs. NMI Holdings |
| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
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..
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