Correlation Between Six Flags and Vista Outdoor
Can any of the company-specific risk be diversified away by investing in both Six Flags and Vista Outdoor 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 Vista Outdoor 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 Vista Outdoor, you can compare the effects of market volatilities on Six Flags and Vista Outdoor 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 Vista Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Flags and Vista Outdoor.
Diversification Opportunities for Six Flags and Vista Outdoor
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Six and Vista is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and Vista Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Outdoor 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 Vista Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Outdoor has no effect on the direction of Six Flags i.e., Six Flags and Vista Outdoor go up and down completely randomly.
Pair Corralation between Six Flags and Vista Outdoor
Considering the 90-day investment horizon Six Flags is expected to generate 3.33 times less return on investment than Vista Outdoor. In addition to that, Six Flags is 1.28 times more volatile than Vista Outdoor. It trades about 0.03 of its total potential returns per unit of risk. Vista Outdoor is currently generating about 0.13 per unit of volatility. If you would invest 2,956 in Vista Outdoor on November 3, 2024 and sell it today you would earn a total of 1,507 from holding Vista Outdoor or generate 50.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.66% |
| Values | Daily Returns |
Six Flags Entertainment vs. Vista Outdoor
Performance |
| Timeline |
| Six Flags Entertainment |
| Vista Outdoor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
Six Flags and Vista Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Flags and Vista Outdoor
The main advantage of trading using opposite Six Flags and Vista Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags position performs unexpectedly, Vista Outdoor 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 Vista Outdoor will offset losses from the drop in Vista Outdoor's long position.| Six Flags vs. Planet Fitness | Six Flags vs. Madison Square Garden | Six Flags vs. Mattel Inc | Six Flags vs. Johnson Outdoors |
| Vista Outdoor vs. Clarus Corp | Vista Outdoor vs. Johnson Outdoors | Vista Outdoor vs. Escalade Incorporated | Vista Outdoor vs. JAKKS Pacific |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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