Correlation Between Six Flags and SEAS Old
Can any of the company-specific risk be diversified away by investing in both Six Flags and SEAS Old 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 SEAS Old 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 SEAS Old, you can compare the effects of market volatilities on Six Flags and SEAS Old 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 SEAS Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Flags and SEAS Old.
Diversification Opportunities for Six Flags and SEAS Old
Modest diversification
The 3 months correlation between Six and SEAS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and SEAS Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEAS Old 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 SEAS Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEAS Old has no effect on the direction of Six Flags i.e., Six Flags and SEAS Old go up and down completely randomly.
Pair Corralation between Six Flags and SEAS Old
Considering the 90-day investment horizon Six Flags Entertainment is expected to generate 0.89 times more return on investment than SEAS Old. However, Six Flags Entertainment is 1.13 times less risky than SEAS Old. It trades about 0.03 of its potential returns per unit of risk. SEAS Old is currently generating about -0.04 per unit of risk. If you would invest 3,842 in Six Flags Entertainment on October 14, 2024 and sell it today you would earn a total of 795.00 from holding Six Flags Entertainment or generate 20.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 25.6% |
| Values | Daily Returns |
Six Flags Entertainment vs. SEAS Old
Performance |
| Timeline |
| Six Flags Entertainment |
| SEAS Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Six Flags and SEAS Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Flags and SEAS Old
The main advantage of trading using opposite Six Flags and SEAS Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags position performs unexpectedly, SEAS Old 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 SEAS Old will offset losses from the drop in SEAS Old's long position.| Six Flags vs. Planet Fitness | Six Flags vs. Madison Square Garden | Six Flags vs. Mattel Inc | Six Flags vs. Johnson Outdoors |
| SEAS Old vs. JAKKS Pacific | SEAS Old vs. OneSpaWorld Holdings | SEAS Old vs. Clarus Corp | SEAS Old vs. Six Flags Entertainment |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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