Correlation Between Hollywood Bowl and Metro Bank
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Metro Bank 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 Metro Bank 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 Metro Bank PLC, you can compare the effects of market volatilities on Hollywood Bowl and Metro Bank 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 Metro Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Metro Bank.
Diversification Opportunities for Hollywood Bowl and Metro Bank
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hollywood and Metro is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Metro Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Bank 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 Metro Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Bank PLC has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Metro Bank go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Metro Bank
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to under-perform the Metro Bank. But the stock apears to be less risky and, when comparing its historical volatility, Hollywood Bowl Group is 1.77 times less risky than Metro Bank. The stock trades about -0.16 of its potential returns per unit of risk. The Metro Bank PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,310 in Metro Bank PLC on October 30, 2024 and sell it today you would earn a total of 50.00 from holding Metro Bank PLC or generate 0.54% 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. Metro Bank PLC
Performance |
| Timeline |
| Hollywood Bowl Group |
| Metro Bank PLC |
Hollywood Bowl and Metro Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Metro Bank
The main advantage of trading using opposite Hollywood Bowl and Metro Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Metro Bank 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 Metro Bank will offset losses from the drop in Metro Bank's long position.| Hollywood Bowl vs. Travel Leisure Co | Hollywood Bowl vs. Datalogic | Hollywood Bowl vs. Nordic Semiconductor ASA | Hollywood Bowl vs. Universal Display Corp |
| Metro Bank vs. URU Metals | Metro Bank vs. Bisichi Mining PLC | Metro Bank vs. European Metals Holdings | Metro Bank vs. Cornish Metals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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