Correlation Between Manchester United and Roku
Can any of the company-specific risk be diversified away by investing in both Manchester United 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 Manchester United and Roku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manchester United and Roku Inc, you can compare the effects of market volatilities on Manchester United 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 Manchester United with a short position of Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manchester United and Roku.
Diversification Opportunities for Manchester United and Roku
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Manchester and Roku is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Manchester United and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc and Manchester United 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 Manchester United 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 Manchester United i.e., Manchester United and Roku go up and down completely randomly.
Pair Corralation between Manchester United and Roku
Given the investment horizon of 90 days Manchester United is expected to under-perform the Roku. But the stock apears to be less risky and, when comparing its historical volatility, Manchester United is 1.38 times less risky than Roku. The stock trades about -0.01 of its potential returns per unit of risk. The Roku Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,490 in Roku Inc on November 1, 2024 and sell it today you would earn a total of 2,768 from holding Roku Inc or generate 50.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manchester United vs. Roku Inc
Performance |
| Timeline |
| Manchester United |
| Roku Inc |
Manchester United and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manchester United and Roku
The main advantage of trading using opposite Manchester United and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manchester United 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.| Manchester United vs. Endeavor Group Holdings | Manchester United vs. Live Nation Entertainment | Manchester United vs. Warner Music Group | Manchester United vs. Liberty Media |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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