Correlation Between Image Protect and Global Entertainment
Can any of the company-specific risk be diversified away by investing in both Image Protect and Global Entertainment 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 Image Protect and Global Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Image Protect and Global Entertainment Holdings, you can compare the effects of market volatilities on Image Protect and Global Entertainment 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 Image Protect with a short position of Global Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Image Protect and Global Entertainment.
Diversification Opportunities for Image Protect and Global Entertainment
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Image and Global is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Image Protect and Global Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Entertainment and Image Protect 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 Image Protect are associated (or correlated) with Global Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Entertainment has no effect on the direction of Image Protect i.e., Image Protect and Global Entertainment go up and down completely randomly.
Pair Corralation between Image Protect and Global Entertainment
Given the investment horizon of 90 days Image Protect is expected to generate 3.0 times more return on investment than Global Entertainment. However, Image Protect is 3.0 times more volatile than Global Entertainment Holdings. It trades about 0.12 of its potential returns per unit of risk. Global Entertainment Holdings is currently generating about 0.07 per unit of risk. If you would invest 0.02 in Image Protect on September 3, 2024 and sell it today you would lose (0.01) from holding Image Protect or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Image Protect vs. Global Entertainment Holdings
Performance |
| Timeline |
| Image Protect |
| Global Entertainment |
Image Protect and Global Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Image Protect and Global Entertainment
The main advantage of trading using opposite Image Protect and Global Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Image Protect position performs unexpectedly, Global Entertainment 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 Global Entertainment will offset losses from the drop in Global Entertainment's long position.| Image Protect vs. AB International Group | Image Protect vs. Bowmo Inc | Image Protect vs. Protek Capital | Image Protect vs. Ackroo Inc |
| Global Entertainment vs. Atlanta Braves Holdings, | Global Entertainment vs. Sycamore Entmt Grp | Global Entertainment vs. Atlanta Braves Holdings, | Global Entertainment vs. Warner Bros Discovery |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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