Correlation Between Disney and IShares Europe
Can any of the company-specific risk be diversified away by investing in both Disney and IShares Europe 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 IShares Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and iShares Europe ETF, you can compare the effects of market volatilities on Disney and IShares Europe 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 IShares Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and IShares Europe.
Diversification Opportunities for Disney and IShares Europe
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Disney and IShares is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and iShares Europe ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Europe ETF 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 IShares Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Europe ETF has no effect on the direction of Disney i.e., Disney and IShares Europe go up and down completely randomly.
Pair Corralation between Disney and IShares Europe
Considering the 90-day investment horizon Walt Disney is expected to generate 2.1 times more return on investment than IShares Europe. However, Disney is 2.1 times more volatile than iShares Europe ETF. It trades about 0.48 of its potential returns per unit of risk. iShares Europe ETF is currently generating about -0.29 per unit of risk. If you would invest 9,620 in Walt Disney on August 28, 2024 and sell it today you would earn a total of 1,980 from holding Walt Disney or generate 20.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. iShares Europe ETF
Performance |
| Timeline |
| Walt Disney |
| iShares Europe ETF |
Disney and IShares Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and IShares Europe
The main advantage of trading using opposite Disney and IShares Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, IShares Europe 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 IShares Europe will offset losses from the drop in IShares Europe's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| IShares Europe vs. WisdomTree International Hedged | IShares Europe vs. WisdomTree Emerging Markets | IShares Europe vs. WisdomTree Dynamic Currency |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |