Correlation Between Intermediate Capital and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital 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 Intermediate Capital and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Capital Group and Hollywood Bowl Group, you can compare the effects of market volatilities on Intermediate Capital 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 Intermediate Capital with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and Hollywood Bowl.
Diversification Opportunities for Intermediate Capital and Hollywood Bowl
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intermediate and Hollywood is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group 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 Intermediate Capital 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 Intermediate Capital Group 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 Intermediate Capital i.e., Intermediate Capital and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Intermediate Capital and Hollywood Bowl
Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 1.72 times more return on investment than Hollywood Bowl. However, Intermediate Capital is 1.72 times more volatile than Hollywood Bowl Group. It trades about -0.01 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.19 per unit of risk. If you would invest 211,800 in Intermediate Capital Group on August 25, 2024 and sell it today you would lose (2,400) from holding Intermediate Capital Group or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Intermediate Capital Group vs. Hollywood Bowl Group
Performance |
| Timeline |
| Intermediate Capital |
| Hollywood Bowl Group |
Intermediate Capital and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and Hollywood Bowl
The main advantage of trading using opposite Intermediate Capital and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital 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.| Intermediate Capital vs. Catalyst Media Group | Intermediate Capital vs. Oncimmune Holdings plc | Intermediate Capital vs. Invesco Health Care | Intermediate Capital vs. Coor Service Management |
| Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Toyota Motor Corp | Hollywood Bowl vs. Hon Hai Precision |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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