Correlation Between Six Flags and Bowlero Corp
Can any of the company-specific risk be diversified away by investing in both Six Flags and Bowlero Corp 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 Six Flags and Bowlero Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Six Flags Entertainment and Bowlero Corp, you can compare the effects of market volatilities on Six Flags and Bowlero Corp 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 Six Flags with a short position of Bowlero Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Flags and Bowlero Corp.
Diversification Opportunities for Six Flags and Bowlero Corp
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Six and Bowlero is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and Bowlero Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowlero Corp and Six Flags 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 Six Flags Entertainment are associated (or correlated) with Bowlero Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowlero Corp has no effect on the direction of Six Flags i.e., Six Flags and Bowlero Corp go up and down completely randomly.
Pair Corralation between Six Flags and Bowlero Corp
Considering the 90-day investment horizon Six Flags is expected to generate 1.25 times less return on investment than Bowlero Corp. But when comparing it to its historical volatility, Six Flags Entertainment is 1.71 times less risky than Bowlero Corp. It trades about 0.18 of its potential returns per unit of risk. Bowlero Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,149 in Bowlero Corp on August 28, 2024 and sell it today you would earn a total of 114.00 from holding Bowlero Corp or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Six Flags Entertainment vs. Bowlero Corp
Performance |
| Timeline |
| Six Flags Entertainment |
| Bowlero Corp |
Six Flags and Bowlero Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Flags and Bowlero Corp
The main advantage of trading using opposite Six Flags and Bowlero Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags position performs unexpectedly, Bowlero Corp 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 Bowlero Corp will offset losses from the drop in Bowlero Corp's long position.| Six Flags vs. Planet Fitness | Six Flags vs. Madison Square Garden | Six Flags vs. Mattel Inc | Six Flags vs. Johnson Outdoors |
| Bowlero Corp vs. Acushnet Holdings Corp | Bowlero Corp vs. YETI Holdings | Bowlero Corp vs. Madison Square Garden | Bowlero Corp vs. Life Time Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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