Correlation Between Hollywood Bowl and Target Healthcare
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Target Healthcare 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 Target Healthcare 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 Target Healthcare REIT, you can compare the effects of market volatilities on Hollywood Bowl and Target Healthcare 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 Target Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Target Healthcare.
Diversification Opportunities for Hollywood Bowl and Target Healthcare
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hollywood and Target is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Target Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Healthcare REIT 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 Target Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Healthcare REIT has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Target Healthcare go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Target Healthcare
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to under-perform the Target Healthcare. In addition to that, Hollywood Bowl is 1.72 times more volatile than Target Healthcare REIT. It trades about -0.13 of its total potential returns per unit of risk. Target Healthcare REIT is currently generating about -0.07 per unit of volatility. If you would invest 8,400 in Target Healthcare REIT on October 30, 2024 and sell it today you would lose (320.00) from holding Target Healthcare REIT or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. Target Healthcare REIT
Performance |
| Timeline |
| Hollywood Bowl Group |
| Target Healthcare REIT |
Hollywood Bowl and Target Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Target Healthcare
The main advantage of trading using opposite Hollywood Bowl and Target Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Target Healthcare 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 Target Healthcare will offset losses from the drop in Target Healthcare'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 |
| Target Healthcare vs. Sealed Air Corp | Target Healthcare vs. Wizz Air Holdings | Target Healthcare vs. AMG Advanced Metallurgical | Target Healthcare vs. Porvair 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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