Correlation Between Hollywood Bowl and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and CleanTech Lithium 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 CleanTech Lithium 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 CleanTech Lithium plc, you can compare the effects of market volatilities on Hollywood Bowl and CleanTech Lithium 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 CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and CleanTech Lithium.
Diversification Opportunities for Hollywood Bowl and CleanTech Lithium
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hollywood and CleanTech is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and CleanTech Lithium plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanTech Lithium 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 CleanTech Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanTech Lithium plc has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Hollywood Bowl and CleanTech Lithium
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to generate 0.33 times more return on investment than CleanTech Lithium. However, Hollywood Bowl Group is 3.01 times less risky than CleanTech Lithium. It trades about 0.02 of its potential returns per unit of risk. CleanTech Lithium plc is currently generating about -0.05 per unit of risk. If you would invest 25,758 in Hollywood Bowl Group on October 13, 2024 and sell it today you would earn a total of 1,942 from holding Hollywood Bowl Group or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hollywood Bowl Group vs. CleanTech Lithium plc
Performance |
| Timeline |
| Hollywood Bowl Group |
| CleanTech Lithium plc |
Hollywood Bowl and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and CleanTech Lithium
The main advantage of trading using opposite Hollywood Bowl and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, CleanTech Lithium 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 CleanTech Lithium will offset losses from the drop in CleanTech Lithium's long position.| Hollywood Bowl vs. Cornish Metals | Hollywood Bowl vs. Lundin Mining Corp | Hollywood Bowl vs. Livermore Investments Group | Hollywood Bowl vs. First Class Metals |
| CleanTech Lithium vs. LBG Media PLC | CleanTech Lithium vs. Universal Display Corp | CleanTech Lithium vs. Ubisoft Entertainment | CleanTech Lithium 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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