Correlation Between Disney and Legal General
Can any of the company-specific risk be diversified away by investing in both Disney and Legal General 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 Legal General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Legal General Group, you can compare the effects of market volatilities on Disney and Legal General 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 Legal General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Legal General.
Diversification Opportunities for Disney and Legal General
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Disney and Legal is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Legal General Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legal General Group 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 Legal General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legal General Group has no effect on the direction of Disney i.e., Disney and Legal General go up and down completely randomly.
Pair Corralation between Disney and Legal General
Considering the 90-day investment horizon Walt Disney is expected to generate 1.8 times more return on investment than Legal General. However, Disney is 1.8 times more volatile than Legal General Group. It trades about 0.48 of its potential returns per unit of risk. Legal General Group is currently generating about -0.12 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Legal General Group
Performance |
| Timeline |
| Walt Disney |
| Legal General Group |
Disney and Legal General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Legal General
The main advantage of trading using opposite Disney and Legal General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Legal General 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 Legal General will offset losses from the drop in Legal General's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| Legal General vs. Blackstone Group | Legal General vs. BlackRock | Legal General vs. Apollo Global Management | Legal General vs. Bank of New |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |