Correlation Between Bowlin Travel and Winmark
Can any of the company-specific risk be diversified away by investing in both Bowlin Travel and Winmark 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 Bowlin Travel and Winmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowlin Travel Centers and Winmark, you can compare the effects of market volatilities on Bowlin Travel and Winmark 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 Bowlin Travel with a short position of Winmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowlin Travel and Winmark.
Diversification Opportunities for Bowlin Travel and Winmark
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bowlin and Winmark is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bowlin Travel Centers and Winmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winmark and Bowlin Travel 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 Bowlin Travel Centers are associated (or correlated) with Winmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winmark has no effect on the direction of Bowlin Travel i.e., Bowlin Travel and Winmark go up and down completely randomly.
Pair Corralation between Bowlin Travel and Winmark
Given the investment horizon of 90 days Bowlin Travel is expected to generate 8.84 times less return on investment than Winmark. But when comparing it to its historical volatility, Bowlin Travel Centers is 8.61 times less risky than Winmark. It trades about 0.22 of its potential returns per unit of risk. Winmark is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 37,021 in Winmark on August 27, 2024 and sell it today you would earn a total of 3,306 from holding Winmark or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bowlin Travel Centers vs. Winmark
Performance |
| Timeline |
| Bowlin Travel Centers |
| Winmark |
Bowlin Travel and Winmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowlin Travel and Winmark
The main advantage of trading using opposite Bowlin Travel and Winmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowlin Travel position performs unexpectedly, Winmark 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 Winmark will offset losses from the drop in Winmark's long position.| Bowlin Travel vs. FitLife Brands, Common | Bowlin Travel vs. HUMANA INC | Bowlin Travel vs. SCOR PK | Bowlin Travel vs. Aquagold International |
| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill Investment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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