Correlation Between Hollywood Bowl and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Abingdon Health 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 Abingdon Health 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 Abingdon Health Plc, you can compare the effects of market volatilities on Hollywood Bowl and Abingdon Health 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 Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Abingdon Health.
Diversification Opportunities for Hollywood Bowl and Abingdon Health
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hollywood and Abingdon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc 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 Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Abingdon Health go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Abingdon Health
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to under-perform the Abingdon Health. But the stock apears to be less risky and, when comparing its historical volatility, Hollywood Bowl Group is 2.53 times less risky than Abingdon Health. The stock trades about -0.18 of its potential returns per unit of risk. The Abingdon Health Plc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 775.00 in Abingdon Health Plc on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Abingdon Health Plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. Abingdon Health Plc
Performance |
| Timeline |
| Hollywood Bowl Group |
| Abingdon Health Plc |
Hollywood Bowl and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Abingdon Health
The main advantage of trading using opposite Hollywood Bowl and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Abingdon Health 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Toyota Motor Corp | Hollywood Bowl vs. Reliance Industries Ltd |
| Abingdon Health vs. Axfood AB | Abingdon Health vs. Mobile Tornado Group | Abingdon Health vs. United Utilities Group | Abingdon Health vs. Grieg Seafood |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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