Correlation Between Hollywood Bowl and ZINC MEDIA
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and ZINC MEDIA 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 ZINC MEDIA 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 ZINC MEDIA GR, you can compare the effects of market volatilities on Hollywood Bowl and ZINC MEDIA 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 ZINC MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and ZINC MEDIA.
Diversification Opportunities for Hollywood Bowl and ZINC MEDIA
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hollywood and ZINC is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and ZINC MEDIA GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINC MEDIA GR 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 ZINC MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINC MEDIA GR has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and ZINC MEDIA go up and down completely randomly.
Pair Corralation between Hollywood Bowl and ZINC MEDIA
Assuming the 90 days horizon Hollywood Bowl Group is expected to generate 0.76 times more return on investment than ZINC MEDIA. However, Hollywood Bowl Group is 1.31 times less risky than ZINC MEDIA. It trades about -0.13 of its potential returns per unit of risk. ZINC MEDIA GR is currently generating about -0.13 per unit of risk. If you would invest 388.00 in Hollywood Bowl Group on August 28, 2024 and sell it today you would lose (16.00) from holding Hollywood Bowl Group or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hollywood Bowl Group vs. ZINC MEDIA GR
Performance |
| Timeline |
| Hollywood Bowl Group |
| ZINC MEDIA GR |
Hollywood Bowl and ZINC MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and ZINC MEDIA
The main advantage of trading using opposite Hollywood Bowl and ZINC MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, ZINC MEDIA 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 ZINC MEDIA will offset losses from the drop in ZINC MEDIA's long position.The idea behind Hollywood Bowl Group and ZINC MEDIA GR 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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