Correlation Between MYR and Dolphin Entertainment
Can any of the company-specific risk be diversified away by investing in both MYR and Dolphin 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 MYR and Dolphin Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYR Group and Dolphin Entertainment, you can compare the effects of market volatilities on MYR and Dolphin 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 MYR with a short position of Dolphin Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and Dolphin Entertainment.
Diversification Opportunities for MYR and Dolphin Entertainment
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MYR and Dolphin is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment and MYR 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 MYR Group are associated (or correlated) with Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of MYR i.e., MYR and Dolphin Entertainment go up and down completely randomly.
Pair Corralation between MYR and Dolphin Entertainment
Given the investment horizon of 90 days MYR Group is expected to generate 1.13 times more return on investment than Dolphin Entertainment. However, MYR is 1.13 times more volatile than Dolphin Entertainment. It trades about 0.4 of its potential returns per unit of risk. Dolphin Entertainment is currently generating about -0.17 per unit of risk. If you would invest 11,676 in MYR Group on August 27, 2024 and sell it today you would earn a total of 4,291 from holding MYR Group or generate 36.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYR Group vs. Dolphin Entertainment
Performance |
| Timeline |
| MYR Group |
| Dolphin Entertainment |
MYR and Dolphin Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYR and Dolphin Entertainment
The main advantage of trading using opposite MYR and Dolphin Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYR position performs unexpectedly, Dolphin 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 Dolphin Entertainment will offset losses from the drop in Dolphin Entertainment's long position.The idea behind MYR Group and Dolphin Entertainment 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.| Dolphin Entertainment vs. Hall of Fame | Dolphin Entertainment vs. Wisekey International Holding | Dolphin Entertainment vs. Oriental Culture Holding |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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