Correlation Between Disney and GLCN
Can any of the company-specific risk be diversified away by investing in both Disney and GLCN 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 Disney and GLCN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and GLCN, you can compare the effects of market volatilities on Disney and GLCN 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 Disney with a short position of GLCN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and GLCN.
Diversification Opportunities for Disney and GLCN
Excellent diversification
The 3 months correlation between Disney and GLCN is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and GLCN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLCN and Disney 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 Walt Disney are associated (or correlated) with GLCN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLCN has no effect on the direction of Disney i.e., Disney and GLCN go up and down completely randomly.
Pair Corralation between Disney and GLCN
If you would invest 10,105 in Walt Disney on September 14, 2024 and sell it today you would earn a total of 1,250 from holding Walt Disney or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Walt Disney vs. GLCN
Performance |
| Timeline |
| Walt Disney |
| GLCN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Disney and GLCN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and GLCN
The main advantage of trading using opposite Disney and GLCN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, GLCN 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 GLCN will offset losses from the drop in GLCN's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| GLCN vs. KraneShares CSI China | GLCN vs. Invesco China Technology | GLCN vs. iShares MSCI India | GLCN vs. Xtrackers Harvest CSI |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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