Correlation Between Hollywood Bowl and Biotech Growth
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Biotech Growth 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 Biotech Growth 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 The Biotech Growth, you can compare the effects of market volatilities on Hollywood Bowl and Biotech Growth 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 Biotech Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Biotech Growth.
Diversification Opportunities for Hollywood Bowl and Biotech Growth
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hollywood and Biotech is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and The Biotech Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotech Growth 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 Biotech Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotech Growth has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Biotech Growth go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Biotech Growth
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to under-perform the Biotech Growth. But the stock apears to be less risky and, when comparing its historical volatility, Hollywood Bowl Group is 1.02 times less risky than Biotech Growth. The stock trades about -0.16 of its potential returns per unit of risk. The The Biotech Growth is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 86,300 in The Biotech Growth on October 29, 2024 and sell it today you would earn a total of 400.00 from holding The Biotech Growth or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. The Biotech Growth
Performance |
| Timeline |
| Hollywood Bowl Group |
| Biotech Growth |
Hollywood Bowl and Biotech Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Biotech Growth
The main advantage of trading using opposite Hollywood Bowl and Biotech Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Biotech Growth 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 Biotech Growth will offset losses from the drop in Biotech Growth's long position.| Hollywood Bowl vs. Jacquet Metal Service | Hollywood Bowl vs. Coeur Mining | Hollywood Bowl vs. First Class Metals | Hollywood Bowl vs. Europa Metals |
| Biotech Growth vs. SupplyMe Capital PLC | Biotech Growth vs. Premier African Minerals | Biotech Growth vs. SANTANDER UK 8 | Biotech Growth vs. Tower Resources 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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