Correlation Between Hollywood Bowl and Centaur Media
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Centaur Media 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 Centaur Media 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 Centaur Media, you can compare the effects of market volatilities on Hollywood Bowl and Centaur Media 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Centaur Media.
Diversification Opportunities for Hollywood Bowl and Centaur Media
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hollywood and Centaur is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Centaur Media go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Centaur Media
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to generate 1.29 times more return on investment than Centaur Media. However, Hollywood Bowl is 1.29 times more volatile than Centaur Media. It trades about -0.02 of its potential returns per unit of risk. Centaur Media is currently generating about -0.43 per unit of risk. If you would invest 27,409 in Hollywood Bowl Group on November 28, 2024 and sell it today you would lose (259.00) from holding Hollywood Bowl Group or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. Centaur Media
Performance |
| Timeline |
| Hollywood Bowl Group |
| Centaur Media |
Hollywood Bowl and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Centaur Media
The main advantage of trading using opposite Hollywood Bowl and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| Hollywood Bowl vs. Centaur Media | Hollywood Bowl vs. Fevertree Drinks Plc | Hollywood Bowl vs. Micron Technology | Hollywood Bowl vs. Sunny Optical Technology |
| Centaur Media vs. Endeavour Mining Corp | Centaur Media vs. Capital Drilling | Centaur Media vs. BW Offshore | Centaur Media vs. iShares Physical Silver |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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