Correlation Between Hollywood Bowl and Argo Blockchain
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Argo Blockchain 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 Argo Blockchain 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 Argo Blockchain PLC, you can compare the effects of market volatilities on Hollywood Bowl and Argo Blockchain 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 Argo Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Argo Blockchain.
Diversification Opportunities for Hollywood Bowl and Argo Blockchain
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hollywood and Argo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Argo Blockchain PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain 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 Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain PLC has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Argo Blockchain go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Argo Blockchain
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to generate 0.24 times more return on investment than Argo Blockchain. However, Hollywood Bowl Group is 4.15 times less risky than Argo Blockchain. It trades about -0.17 of its potential returns per unit of risk. Argo Blockchain PLC is currently generating about -0.18 per unit of risk. If you would invest 29,600 in Hollywood Bowl Group on October 25, 2024 and sell it today you would lose (1,300) from holding Hollywood Bowl Group or give up 4.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. Argo Blockchain PLC
Performance |
| Timeline |
| Hollywood Bowl Group |
| Argo Blockchain PLC |
Hollywood Bowl and Argo Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Argo Blockchain
The main advantage of trading using opposite Hollywood Bowl and Argo Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Argo Blockchain 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 Argo Blockchain will offset losses from the drop in Argo Blockchain's long position.| Hollywood Bowl vs. Lundin Mining Corp | Hollywood Bowl vs. Silvercorp Metals | Hollywood Bowl vs. Metals Exploration Plc | Hollywood Bowl vs. Sovereign Metals |
| Argo Blockchain vs. One Media iP | Argo Blockchain vs. Zinc Media Group | Argo Blockchain vs. AcadeMedia AB | Argo Blockchain vs. Hollywood Bowl Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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