Correlation Between Hollywood Bowl and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Zegona Communications 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 Zegona Communications 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 Zegona Communications Plc, you can compare the effects of market volatilities on Hollywood Bowl and Zegona Communications 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 Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Zegona Communications.
Diversification Opportunities for Hollywood Bowl and Zegona Communications
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hollywood and Zegona is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Zegona Communications Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zegona Communications 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 Zegona Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zegona Communications Plc has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Zegona Communications go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Zegona Communications
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to under-perform the Zegona Communications. But the stock apears to be less risky and, when comparing its historical volatility, Hollywood Bowl Group is 2.15 times less risky than Zegona Communications. The stock trades about -0.01 of its potential returns per unit of risk. The Zegona Communications Plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 32,800 in Zegona Communications Plc on September 2, 2024 and sell it today you would earn a total of 2,000 from holding Zegona Communications Plc or generate 6.1% 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. Zegona Communications Plc
Performance |
| Timeline |
| Hollywood Bowl Group |
| Zegona Communications Plc |
Hollywood Bowl and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Zegona Communications
The main advantage of trading using opposite Hollywood Bowl and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Zegona Communications 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 Zegona Communications will offset losses from the drop in Zegona Communications' long position.| Hollywood Bowl vs. Austevoll Seafood ASA | Hollywood Bowl vs. Trainline Plc | Hollywood Bowl vs. Ecofin Global Utilities | Hollywood Bowl vs. Lindsell Train Investment |
| Zegona Communications vs. Samsung Electronics Co | Zegona Communications vs. Samsung Electronics Co | Zegona Communications vs. Hyundai Motor | Zegona Communications vs. Toyota Motor Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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