Correlation Between Capricorn Energy and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Capricorn Energy and Hollywood Bowl 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 Capricorn Energy and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricorn Energy PLC and Hollywood Bowl Group, you can compare the effects of market volatilities on Capricorn Energy and Hollywood Bowl 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 Capricorn Energy with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricorn Energy and Hollywood Bowl.
Diversification Opportunities for Capricorn Energy and Hollywood Bowl
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capricorn and Hollywood is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Capricorn Energy PLC and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group and Capricorn Energy 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 Capricorn Energy PLC are associated (or correlated) with Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Capricorn Energy i.e., Capricorn Energy and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Capricorn Energy and Hollywood Bowl
Assuming the 90 days trading horizon Capricorn Energy PLC is expected to under-perform the Hollywood Bowl. In addition to that, Capricorn Energy is 1.82 times more volatile than Hollywood Bowl Group. It trades about -0.01 of its total potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.03 per unit of volatility. If you would invest 22,589 in Hollywood Bowl Group on November 2, 2024 and sell it today you would earn a total of 4,861 from holding Hollywood Bowl Group or generate 21.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Capricorn Energy PLC vs. Hollywood Bowl Group
Performance |
| Timeline |
| Capricorn Energy PLC |
| Hollywood Bowl Group |
Capricorn Energy and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capricorn Energy and Hollywood Bowl
The main advantage of trading using opposite Capricorn Energy and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricorn Energy position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Capricorn Energy vs. Datalogic | Capricorn Energy vs. JB Hunt Transport | Capricorn Energy vs. Pets at Home | Capricorn Energy vs. Wizz Air Holdings |
| Hollywood Bowl vs. Geely Automobile Holdings | Hollywood Bowl vs. Associated British Foods | Hollywood Bowl vs. Charter Communications Cl | Hollywood Bowl vs. Darden Restaurants |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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