Correlation Between Big Screen and Hanover House
Can any of the company-specific risk be diversified away by investing in both Big Screen and Hanover House 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 Big Screen and Hanover House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Screen Entertainment and Hanover House, you can compare the effects of market volatilities on Big Screen and Hanover House 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 Big Screen with a short position of Hanover House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Screen and Hanover House.
Diversification Opportunities for Big Screen and Hanover House
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Big and Hanover is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Big Screen Entertainment and Hanover House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover House and Big Screen 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 Big Screen Entertainment are associated (or correlated) with Hanover House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover House has no effect on the direction of Big Screen i.e., Big Screen and Hanover House go up and down completely randomly.
Pair Corralation between Big Screen and Hanover House
Given the investment horizon of 90 days Big Screen Entertainment is expected to under-perform the Hanover House. In addition to that, Big Screen is 1.55 times more volatile than Hanover House. It trades about -0.13 of its total potential returns per unit of risk. Hanover House is currently generating about 0.1 per unit of volatility. If you would invest 0.72 in Hanover House on November 28, 2024 and sell it today you would earn a total of 0.07 from holding Hanover House or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Screen Entertainment vs. Hanover House
Performance |
| Timeline |
| Big Screen Entertainment |
| Hanover House |
Big Screen and Hanover House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Screen and Hanover House
The main advantage of trading using opposite Big Screen and Hanover House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Screen position performs unexpectedly, Hanover House 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 Hanover House will offset losses from the drop in Hanover House's long position.| Big Screen vs. SNM Gobal Holdings | Big Screen vs. Sycamore Entmt Grp | Big Screen vs. AMC Entertainment Holdings | Big Screen vs. Walt Disney |
| Hanover House vs. Sanwire | Hanover House vs. SNM Gobal Holdings | Hanover House vs. All For One | Hanover House vs. Ggtoor Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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