Correlation Between Hollywood Bowl and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and TIMES CHINA 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 TIMES CHINA 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 TIMES CHINA HLDGS, you can compare the effects of market volatilities on Hollywood Bowl and TIMES CHINA 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 TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and TIMES CHINA.
Diversification Opportunities for Hollywood Bowl and TIMES CHINA
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hollywood and TIMES is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and TIMES CHINA go up and down completely randomly.
Pair Corralation between Hollywood Bowl and TIMES CHINA
Assuming the 90 days horizon Hollywood Bowl is expected to generate 1.24 times less return on investment than TIMES CHINA. But when comparing it to its historical volatility, Hollywood Bowl Group is 6.72 times less risky than TIMES CHINA. It trades about 0.14 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4.05 in TIMES CHINA HLDGS on September 13, 2024 and sell it today you would lose (0.80) from holding TIMES CHINA HLDGS or give up 19.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. TIMES CHINA HLDGS
Performance |
| Timeline |
| Hollywood Bowl Group |
| TIMES CHINA HLDGS |
Hollywood Bowl and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and TIMES CHINA
The main advantage of trading using opposite Hollywood Bowl and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.| Hollywood Bowl vs. Superior Plus Corp | Hollywood Bowl vs. SIVERS SEMICONDUCTORS AB | Hollywood Bowl vs. Norsk Hydro ASA | Hollywood Bowl vs. Reliance Steel Aluminum |
| TIMES CHINA vs. Hollywood Bowl Group | TIMES CHINA vs. ZINC MEDIA GR | TIMES CHINA vs. Universal Entertainment | TIMES CHINA vs. DISTRICT METALS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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