Correlation Between Gaming Realms and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Gaming Realms and Hollywood Bowl 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 Gaming Realms and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming Realms plc and Hollywood Bowl Group, you can compare the effects of market volatilities on Gaming Realms and Hollywood Bowl 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 Gaming Realms with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Realms and Hollywood Bowl.
Diversification Opportunities for Gaming Realms and Hollywood Bowl
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gaming and Hollywood is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Realms plc and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group and Gaming Realms 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 Gaming Realms plc are associated (or correlated) with Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Gaming Realms i.e., Gaming Realms and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Gaming Realms and Hollywood Bowl
Assuming the 90 days trading horizon Gaming Realms plc is expected to generate 1.73 times more return on investment than Hollywood Bowl. However, Gaming Realms is 1.73 times more volatile than Hollywood Bowl Group. It trades about 0.03 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.02 per unit of risk. If you would invest 3,550 in Gaming Realms plc on November 3, 2024 and sell it today you would earn a total of 30.00 from holding Gaming Realms plc or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming Realms plc vs. Hollywood Bowl Group
Performance |
| Timeline |
| Gaming Realms plc |
| Hollywood Bowl Group |
Gaming Realms and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Realms and Hollywood Bowl
The main advantage of trading using opposite Gaming Realms and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Realms position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Gaming Realms vs. National Beverage Corp | Gaming Realms vs. Molson Coors Beverage | Gaming Realms vs. SBM Offshore NV | Gaming Realms vs. Southwest Airlines Co |
| Hollywood Bowl vs. Ubisoft Entertainment | Hollywood Bowl vs. One Media iP | Hollywood Bowl vs. Wyndham Hotels Resorts | Hollywood Bowl vs. Live Nation 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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