Correlation Between Disney and SOUTHERN
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By analyzing existing cross correlation between Walt Disney and SOUTHERN CALIF EDISON, you can compare the effects of market volatilities on Disney and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and SOUTHERN.
Diversification Opportunities for Disney and SOUTHERN
Very good diversification
The 3 months correlation between Disney and SOUTHERN is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and SOUTHERN CALIF EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF EDISON 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF EDISON has no effect on the direction of Disney i.e., Disney and SOUTHERN go up and down completely randomly.
Pair Corralation between Disney and SOUTHERN
Considering the 90-day investment horizon Disney is expected to generate 52.03 times less return on investment than SOUTHERN. But when comparing it to its historical volatility, Walt Disney is 34.93 times less risky than SOUTHERN. It trades about 0.04 of its potential returns per unit of risk. SOUTHERN CALIF EDISON is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,471 in SOUTHERN CALIF EDISON on September 4, 2024 and sell it today you would earn a total of 180.00 from holding SOUTHERN CALIF EDISON or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.59% |
| Values | Daily Returns |
Walt Disney vs. SOUTHERN CALIF EDISON
Performance |
| Timeline |
| Walt Disney |
| SOUTHERN CALIF EDISON |
Disney and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and SOUTHERN
The main advantage of trading using opposite Disney and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| SOUTHERN vs. Braskem SA Class | SOUTHERN vs. Maiden Holdings | SOUTHERN vs. Aegon NV ADR | SOUTHERN vs. Ecovyst |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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