Correlation Between Hollywood Bowl and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and FuelCell Energy 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 FuelCell Energy 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 FuelCell Energy, you can compare the effects of market volatilities on Hollywood Bowl and FuelCell Energy 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 FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and FuelCell Energy.
Diversification Opportunities for Hollywood Bowl and FuelCell Energy
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hollywood and FuelCell is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy 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 FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and FuelCell Energy go up and down completely randomly.
Pair Corralation between Hollywood Bowl and FuelCell Energy
Assuming the 90 days trading horizon Hollywood Bowl is expected to generate 97.67 times less return on investment than FuelCell Energy. But when comparing it to its historical volatility, Hollywood Bowl Group is 72.13 times less risky than FuelCell Energy. It trades about 0.07 of its potential returns per unit of risk. FuelCell Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,778 in FuelCell Energy on September 15, 2024 and sell it today you would lose (2,651) from holding FuelCell Energy or give up 70.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.26% |
| Values | Daily Returns |
Hollywood Bowl Group vs. FuelCell Energy
Performance |
| Timeline |
| Hollywood Bowl Group |
| FuelCell Energy |
Hollywood Bowl and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and FuelCell Energy
The main advantage of trading using opposite Hollywood Bowl and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, FuelCell Energy 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| Hollywood Bowl vs. Berkshire Hathaway | Hollywood Bowl vs. Hyundai Motor | Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Samsung Electronics Co |
| FuelCell Energy vs. Live Nation Entertainment | FuelCell Energy vs. Hollywood Bowl Group | FuelCell Energy vs. Nordic Semiconductor ASA | FuelCell Energy vs. Bloomsbury Publishing Plc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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