Correlation Between Interact and Roku
Can any of the company-specific risk be diversified away by investing in both Interact and Roku 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 Interact and Roku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interact TV and Roku Inc, you can compare the effects of market volatilities on Interact and Roku 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 Interact with a short position of Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interact and Roku.
Diversification Opportunities for Interact and Roku
Good diversification
The 3 months correlation between Interact and Roku is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Interact TV and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc and Interact 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 Interact TV are associated (or correlated) with Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of Interact i.e., Interact and Roku go up and down completely randomly.
Pair Corralation between Interact and Roku
Given the investment horizon of 90 days Interact TV is expected to generate 6.8 times more return on investment than Roku. However, Interact is 6.8 times more volatile than Roku Inc. It trades about 0.1 of its potential returns per unit of risk. Roku Inc is currently generating about 0.08 per unit of risk. If you would invest 0.01 in Interact TV on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Interact TV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Interact TV vs. Roku Inc
Performance |
| Timeline |
| Interact TV |
| Roku Inc |
Interact and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interact and Roku
The main advantage of trading using opposite Interact and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interact position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.| Interact vs. All For One | Interact vs. Aftermaster | Interact vs. Lingerie Fighting Championships | Interact vs. Major League Football |
| Roku vs. Walt Disney | Roku vs. AMC Entertainment Holdings | Roku vs. Paramount Global Class | Roku 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 CEOs Directory module to screen CEOs from public companies around the world.
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