Correlation Between Hollywall Entertainment and Imax Corp
Can any of the company-specific risk be diversified away by investing in both Hollywall Entertainment and Imax 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 Hollywall Entertainment and Imax Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hollywall Entertainment and Imax Corp, you can compare the effects of market volatilities on Hollywall Entertainment and Imax 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 Hollywall Entertainment with a short position of Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywall Entertainment and Imax Corp.
Diversification Opportunities for Hollywall Entertainment and Imax Corp
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hollywall and Imax is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hollywall Entertainment and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax Corp and Hollywall Entertainment 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 Hollywall Entertainment are associated (or correlated) with Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of Hollywall Entertainment i.e., Hollywall Entertainment and Imax Corp go up and down completely randomly.
Pair Corralation between Hollywall Entertainment and Imax Corp
Given the investment horizon of 90 days Hollywall Entertainment is expected to generate 10.75 times more return on investment than Imax Corp. However, Hollywall Entertainment is 10.75 times more volatile than Imax Corp. It trades about 0.07 of its potential returns per unit of risk. Imax Corp is currently generating about 0.05 per unit of risk. If you would invest 16.00 in Hollywall Entertainment on October 24, 2024 and sell it today you would lose (12.90) from holding Hollywall Entertainment or give up 80.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Hollywall Entertainment vs. Imax Corp
Performance |
| Timeline |
| Hollywall Entertainment |
| Imax Corp |
Hollywall Entertainment and Imax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywall Entertainment and Imax Corp
The main advantage of trading using opposite Hollywall Entertainment and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywall Entertainment position performs unexpectedly, Imax 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 Imax Corp will offset losses from the drop in Imax Corp's long position.The idea behind Hollywall Entertainment and Imax Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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