Correlation Between Discover Financial and Dolphin Entertainment
Can any of the company-specific risk be diversified away by investing in both Discover Financial and Dolphin Entertainment 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 Discover Financial and Dolphin Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and Dolphin Entertainment, you can compare the effects of market volatilities on Discover Financial and Dolphin Entertainment 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 Discover Financial with a short position of Dolphin Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and Dolphin Entertainment.
Diversification Opportunities for Discover Financial and Dolphin Entertainment
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Discover and Dolphin is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment and Discover Financial 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 Discover Financial Services are associated (or correlated) with Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of Discover Financial i.e., Discover Financial and Dolphin Entertainment go up and down completely randomly.
Pair Corralation between Discover Financial and Dolphin Entertainment
Considering the 90-day investment horizon Discover Financial Services is expected to generate 0.58 times more return on investment than Dolphin Entertainment. However, Discover Financial Services is 1.73 times less risky than Dolphin Entertainment. It trades about 0.13 of its potential returns per unit of risk. Dolphin Entertainment is currently generating about -0.1 per unit of risk. If you would invest 12,152 in Discover Financial Services on August 29, 2024 and sell it today you would earn a total of 6,104 from holding Discover Financial Services or generate 50.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discover Financial Services vs. Dolphin Entertainment
Performance |
| Timeline |
| Discover Financial |
| Dolphin Entertainment |
Discover Financial and Dolphin Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and Dolphin Entertainment
The main advantage of trading using opposite Discover Financial and Dolphin Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, Dolphin Entertainment 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 Dolphin Entertainment will offset losses from the drop in Dolphin Entertainment's long position.| Discover Financial vs. Ally Financial | Discover Financial vs. Synchrony Financial | Discover Financial vs. Western Union Co | Discover Financial vs. Bread Financial Holdings |
| Dolphin Entertainment vs. Hall of Fame | Dolphin Entertainment vs. Wisekey International Holding | Dolphin Entertainment vs. Oriental Culture Holding | Dolphin Entertainment vs. HUMANA 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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