Correlation Between Disney and Roku

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Disney and Roku 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 Roku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Roku Inc, you can compare the effects of market volatilities on Disney and Roku 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 Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Roku.

Diversification Opportunities for Disney and Roku

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Disney and Roku is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc 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 Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of Disney i.e., Disney and Roku go up and down completely randomly.

Pair Corralation between Disney and Roku

Considering the 90-day investment horizon Walt Disney is expected to generate 0.37 times more return on investment than Roku. However, Walt Disney is 2.68 times less risky than Roku. It trades about 0.49 of its potential returns per unit of risk. Roku Inc is currently generating about -0.05 per unit of risk. If you would invest  9,503  in Walt Disney on August 26, 2024 and sell it today you would earn a total of  2,062  from holding Walt Disney or generate 21.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Walt Disney  vs.  Roku Inc

 Performance 
       Timeline  
Walt Disney 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.
Roku Inc 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Roku Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking signals, Roku is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Disney and Roku Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Disney and Roku

The main advantage of trading using opposite Disney and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.
Disney vs. Roku Inc
Disney vs. AMC Entertainment Holdings
Disney vs. Paramount Global Class
Disney vs. Warner Bros Discovery
The idea behind Walt Disney and Roku Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Roku vs. Walt Disney
Roku vs. AMC Entertainment Holdings
Roku vs. Paramount Global Class
Roku vs. Warner Bros Discovery
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY