Correlation Between Six Flags and WW International
Can any of the company-specific risk be diversified away by investing in both Six Flags and WW International 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 WW International 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 WW International, you can compare the effects of market volatilities on Six Flags and WW International 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 WW International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Flags and WW International.
Diversification Opportunities for Six Flags and WW International
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Six and WW International is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and WW International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WW International 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 WW International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WW International has no effect on the direction of Six Flags i.e., Six Flags and WW International go up and down completely randomly.
Pair Corralation between Six Flags and WW International
Considering the 90-day investment horizon Six Flags is expected to generate 2.12 times less return on investment than WW International. But when comparing it to its historical volatility, Six Flags Entertainment is 3.59 times less risky than WW International. It trades about 0.19 of its potential returns per unit of risk. WW International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 106.00 in WW International on August 30, 2024 and sell it today you would earn a total of 15.00 from holding WW International or generate 14.15% 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. WW International
Performance |
| Timeline |
| Six Flags Entertainment |
| WW International |
Six Flags and WW International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Flags and WW International
The main advantage of trading using opposite Six Flags and WW International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags position performs unexpectedly, WW International 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 WW International will offset losses from the drop in WW International's long position.| Six Flags vs. Planet Fitness | Six Flags vs. Madison Square Garden | Six Flags vs. Mattel Inc | Six Flags vs. Johnson Outdoors |
| WW International vs. HR Block | WW International vs. Service International | WW International vs. Rollins | WW International vs. Carriage Services |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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