Correlation Between Disney and SIGNA Sports
Can any of the company-specific risk be diversified away by investing in both Disney and SIGNA Sports 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 SIGNA Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and SIGNA Sports United, you can compare the effects of market volatilities on Disney and SIGNA Sports 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 SIGNA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and SIGNA Sports.
Diversification Opportunities for Disney and SIGNA Sports
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Disney and SIGNA is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and SIGNA Sports United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIGNA Sports United 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 SIGNA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIGNA Sports United has no effect on the direction of Disney i.e., Disney and SIGNA Sports go up and down completely randomly.
Pair Corralation between Disney and SIGNA Sports
If you would invest 9,363 in Walt Disney on September 3, 2024 and sell it today you would earn a total of 2,384 from holding Walt Disney or generate 25.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 2.38% |
| Values | Daily Returns |
Walt Disney vs. SIGNA Sports United
Performance |
| Timeline |
| Walt Disney |
| SIGNA Sports United |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Disney and SIGNA Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and SIGNA Sports
The main advantage of trading using opposite Disney and SIGNA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, SIGNA Sports 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 SIGNA Sports will offset losses from the drop in SIGNA Sports' long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| SIGNA Sports vs. Sally Beauty Holdings | SIGNA Sports vs. National Vision Holdings | SIGNA Sports vs. MarineMax | SIGNA Sports vs. Caseys General Stores |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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