Correlation Between Bankers Investment and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Bankers Investment and Hollywood Bowl 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 Bankers Investment and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Hollywood Bowl Group, you can compare the effects of market volatilities on Bankers Investment and Hollywood Bowl 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 Bankers Investment with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Hollywood Bowl.
Diversification Opportunities for Bankers Investment and Hollywood Bowl
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bankers and Hollywood is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group and Bankers Investment 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 Bankers Investment Trust are associated (or correlated) with Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Bankers Investment i.e., Bankers Investment and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Bankers Investment and Hollywood Bowl
Assuming the 90 days trading horizon Bankers Investment is expected to generate 4.98 times less return on investment than Hollywood Bowl. But when comparing it to its historical volatility, Bankers Investment Trust is 2.45 times less risky than Hollywood Bowl. It trades about 0.09 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 31,950 in Hollywood Bowl Group on September 18, 2024 and sell it today you would earn a total of 1,400 from holding Hollywood Bowl Group or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. Hollywood Bowl Group
Performance |
| Timeline |
| Bankers Investment Trust |
| Hollywood Bowl Group |
Bankers Investment and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Hollywood Bowl
The main advantage of trading using opposite Bankers Investment and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Bankers Investment vs. Catalyst Media Group | Bankers Investment vs. CATLIN GROUP | Bankers Investment vs. Tamburi Investment Partners | Bankers Investment vs. Magnora ASA |
| Hollywood Bowl vs. Arrow Electronics | Hollywood Bowl vs. Smithson Investment Trust | Hollywood Bowl vs. Bankers Investment Trust | Hollywood Bowl vs. Herald Investment Trust |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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