Correlation Between Hollywood Bowl and Gentex
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Gentex 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 Gentex 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 Gentex, you can compare the effects of market volatilities on Hollywood Bowl and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Gentex.
Diversification Opportunities for Hollywood Bowl and Gentex
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hollywood and Gentex is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Gentex go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Gentex
Assuming the 90 days horizon Hollywood Bowl Group is expected to under-perform the Gentex. In addition to that, Hollywood Bowl is 1.6 times more volatile than Gentex. It trades about -0.13 of its total potential returns per unit of risk. Gentex is currently generating about -0.09 per unit of volatility. If you would invest 2,867 in Gentex on October 29, 2024 and sell it today you would lose (207.00) from holding Gentex or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. Gentex
Performance |
| Timeline |
| Hollywood Bowl Group |
| Gentex |
Hollywood Bowl and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Gentex
The main advantage of trading using opposite Hollywood Bowl and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.| Hollywood Bowl vs. Clean Energy Fuels | Hollywood Bowl vs. CyberArk Software | Hollywood Bowl vs. Singapore Reinsurance | Hollywood Bowl vs. Vienna Insurance Group |
| Gentex vs. Strategic Education | Gentex vs. ARDAGH METAL PACDL 0001 | Gentex vs. American Public Education | Gentex vs. Nippon Light Metal |
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 Correlations module to find global opportunities by holding instruments from different markets.
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