Correlation Between Hollywood Bowl and Bell Food
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Bell Food 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 Bell Food 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 Bell Food Group, you can compare the effects of market volatilities on Hollywood Bowl and Bell Food 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 Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Bell Food.
Diversification Opportunities for Hollywood Bowl and Bell Food
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hollywood and Bell is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group 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 Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Bell Food go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Bell Food
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to generate 1.56 times more return on investment than Bell Food. However, Hollywood Bowl is 1.56 times more volatile than Bell Food Group. It trades about 0.07 of its potential returns per unit of risk. Bell Food Group is currently generating about 0.01 per unit of risk. If you would invest 19,461 in Hollywood Bowl Group on September 3, 2024 and sell it today you would earn a total of 12,539 from holding Hollywood Bowl Group or generate 64.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Hollywood Bowl Group vs. Bell Food Group
Performance |
| Timeline |
| Hollywood Bowl Group |
| Bell Food Group |
Hollywood Bowl and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Bell Food
The main advantage of trading using opposite Hollywood Bowl and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Bell Food 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 Bell Food will offset losses from the drop in Bell Food's long position.| Hollywood Bowl vs. Rockfire Resources plc | Hollywood Bowl vs. Tlou Energy | Hollywood Bowl vs. Falcon Oil Gas | Hollywood Bowl vs. Helium One Global |
| Bell Food vs. Hollywood Bowl Group | Bell Food vs. Atresmedia | Bell Food vs. MTI Wireless Edge | Bell Food vs. Aeorema Communications 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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