Correlation Between MOVIE GAMES and Seven West
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES and Seven West 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 MOVIE GAMES and Seven West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOVIE GAMES SA and Seven West Media, you can compare the effects of market volatilities on MOVIE GAMES and Seven West 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 MOVIE GAMES with a short position of Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and Seven West.
Diversification Opportunities for MOVIE GAMES and Seven West
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOVIE and Seven is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media and MOVIE GAMES 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 MOVIE GAMES SA are associated (or correlated) with Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and Seven West go up and down completely randomly.
Pair Corralation between MOVIE GAMES and Seven West
Assuming the 90 days horizon MOVIE GAMES SA is expected to under-perform the Seven West. But the stock apears to be less risky and, when comparing its historical volatility, MOVIE GAMES SA is 1.48 times less risky than Seven West. The stock trades about -0.07 of its potential returns per unit of risk. The Seven West Media is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Seven West Media on September 15, 2024 and sell it today you would lose (6.35) from holding Seven West Media or give up 45.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOVIE GAMES SA vs. Seven West Media
Performance |
| Timeline |
| MOVIE GAMES SA |
| Seven West Media |
MOVIE GAMES and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and Seven West
The main advantage of trading using opposite MOVIE GAMES and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.| MOVIE GAMES vs. MELIA HOTELS | MOVIE GAMES vs. PPHE HOTEL GROUP | MOVIE GAMES vs. Summit Hotel Properties | MOVIE GAMES vs. Fast Retailing Co |
| Seven West vs. Live Nation Entertainment | Seven West vs. Toho Co | Seven West vs. Superior Plus Corp | Seven West vs. NMI Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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