Correlation Between Disney and ETF Series
Can any of the company-specific risk be diversified away by investing in both Disney and ETF Series 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 ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and ETF Series Solutions, you can compare the effects of market volatilities on Disney and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and ETF Series.
Diversification Opportunities for Disney and ETF Series
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Disney and ETF is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Disney i.e., Disney and ETF Series go up and down completely randomly.
Pair Corralation between Disney and ETF Series
Considering the 90-day investment horizon Walt Disney is expected to generate 2.18 times more return on investment than ETF Series. However, Disney is 2.18 times more volatile than ETF Series Solutions. It trades about 0.06 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.13 per unit of risk. If you would invest 9,196 in Walt Disney on August 26, 2024 and sell it today you would earn a total of 2,369 from holding Walt Disney or generate 25.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. ETF Series Solutions
Performance |
| Timeline |
| Walt Disney |
| ETF Series Solutions |
Disney and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and ETF Series
The main advantage of trading using opposite Disney and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| ETF Series vs. FT Vest Equity | ETF Series vs. Northern Lights | ETF Series vs. Dimensional International High | ETF Series vs. First Trust Exchange Traded |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |