Correlation Between FLOW TRADERS and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Hollywood Bowl Group, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Hollywood Bowl.
Diversification Opportunities for FLOW TRADERS and Hollywood Bowl
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FLOW and Hollywood is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD 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 FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Hollywood Bowl go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Hollywood Bowl
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.71 times more return on investment than Hollywood Bowl. However, FLOW TRADERS LTD is 1.41 times less risky than Hollywood Bowl. It trades about 0.16 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.45 per unit of risk. If you would invest 2,236 in FLOW TRADERS LTD on October 15, 2024 and sell it today you would earn a total of 112.00 from holding FLOW TRADERS LTD or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Hollywood Bowl Group
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Hollywood Bowl Group |
FLOW TRADERS and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Hollywood Bowl
The main advantage of trading using opposite FLOW TRADERS and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. COFCO Joycome Foods | FLOW TRADERS vs. Austevoll Seafood ASA | FLOW TRADERS vs. FAST RETAIL ADR | FLOW TRADERS vs. BJs Wholesale Club |
| Hollywood Bowl vs. TRADELINK ELECTRON | Hollywood Bowl vs. Canon Marketing Japan | Hollywood Bowl vs. FLOW TRADERS LTD | Hollywood Bowl vs. Forsys Metals Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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