Correlation Between Hollywood Bowl and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and SBM Offshore 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 SBM Offshore 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 SBM Offshore NV, you can compare the effects of market volatilities on Hollywood Bowl and SBM Offshore 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 SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and SBM Offshore.
Diversification Opportunities for Hollywood Bowl and SBM Offshore
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hollywood and SBM is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV 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 SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and SBM Offshore go up and down completely randomly.
Pair Corralation between Hollywood Bowl and SBM Offshore
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to generate 1.02 times more return on investment than SBM Offshore. However, Hollywood Bowl is 1.02 times more volatile than SBM Offshore NV. It trades about 0.07 of its potential returns per unit of risk. SBM Offshore NV is currently generating about 0.04 per unit of risk. If you would invest 18,427 in Hollywood Bowl Group on September 2, 2024 and sell it today you would earn a total of 13,573 from holding Hollywood Bowl Group or generate 73.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Hollywood Bowl Group vs. SBM Offshore NV
Performance |
| Timeline |
| Hollywood Bowl Group |
| SBM Offshore NV |
Hollywood Bowl and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and SBM Offshore
The main advantage of trading using opposite Hollywood Bowl and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, SBM Offshore 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 SBM Offshore will offset losses from the drop in SBM Offshore's long position.| Hollywood Bowl vs. Austevoll Seafood ASA | Hollywood Bowl vs. Trainline Plc | Hollywood Bowl vs. Ecofin Global Utilities | Hollywood Bowl vs. Lindsell Train Investment |
| SBM Offshore vs. Zoom Video Communications | SBM Offshore vs. Enbridge | SBM Offshore vs. Endo International PLC | SBM Offshore vs. Diversified Energy |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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