Correlation Between Hollywood Bowl and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on Hollywood Bowl and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Compagnie Plastic.
Diversification Opportunities for Hollywood Bowl and Compagnie Plastic
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hollywood and Compagnie is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Compagnie Plastic
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to under-perform the Compagnie Plastic. In addition to that, Hollywood Bowl is 1.38 times more volatile than Compagnie Plastic Omnium. It trades about -0.1 of its total potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.35 per unit of volatility. If you would invest 837.00 in Compagnie Plastic Omnium on September 24, 2024 and sell it today you would earn a total of 133.00 from holding Compagnie Plastic Omnium or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Hollywood Bowl Group |
| Compagnie Plastic Omnium |
Hollywood Bowl and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Compagnie Plastic
The main advantage of trading using opposite Hollywood Bowl and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Hollywood Bowl vs. Ondine Biomedical | Hollywood Bowl vs. Europa Metals | Hollywood Bowl vs. Revolution Beauty Group | Hollywood Bowl vs. Moonpig Group PLC |
| Compagnie Plastic vs. Hollywood Bowl Group | Compagnie Plastic vs. AcadeMedia AB | Compagnie Plastic vs. Porvair plc | Compagnie Plastic vs. LBG Media 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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