Correlation Between One Media and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both One Media 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 One Media and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Media iP and Hollywood Bowl Group, you can compare the effects of market volatilities on One Media 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 One Media with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Media and Hollywood Bowl.
Diversification Opportunities for One Media and Hollywood Bowl
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between One and Hollywood is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding One Media iP 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 One Media 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 One Media iP 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 One Media i.e., One Media and Hollywood Bowl go up and down completely randomly.
Pair Corralation between One Media and Hollywood Bowl
Assuming the 90 days trading horizon One Media iP is expected to under-perform the Hollywood Bowl. In addition to that, One Media is 1.55 times more volatile than Hollywood Bowl Group. It trades about -0.03 of its total potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.06 per unit of volatility. If you would invest 19,326 in Hollywood Bowl Group on August 25, 2024 and sell it today you would earn a total of 12,124 from holding Hollywood Bowl Group or generate 62.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
One Media iP vs. Hollywood Bowl Group
Performance |
| Timeline |
| One Media iP |
| Hollywood Bowl Group |
One Media and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Media and Hollywood Bowl
The main advantage of trading using opposite One Media and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Media 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.| One Media vs. InterContinental Hotels Group | One Media vs. Metals Exploration Plc | One Media vs. Coeur Mining | One Media vs. Bisichi Mining PLC |
| Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Toyota Motor Corp | Hollywood Bowl vs. Hon Hai Precision |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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