Correlation Between ATRenew and Hollywood Intermediate
Can any of the company-specific risk be diversified away by investing in both ATRenew and Hollywood Intermediate 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 ATRenew and Hollywood Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRenew Inc DRC and Hollywood Intermediate, you can compare the effects of market volatilities on ATRenew and Hollywood Intermediate 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 ATRenew with a short position of Hollywood Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRenew and Hollywood Intermediate.
Diversification Opportunities for ATRenew and Hollywood Intermediate
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATRenew and Hollywood is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ATRenew Inc DRC and Hollywood Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Intermediate and ATRenew 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 ATRenew Inc DRC are associated (or correlated) with Hollywood Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Intermediate has no effect on the direction of ATRenew i.e., ATRenew and Hollywood Intermediate go up and down completely randomly.
Pair Corralation between ATRenew and Hollywood Intermediate
Given the investment horizon of 90 days ATRenew Inc DRC is expected to generate 1.03 times more return on investment than Hollywood Intermediate. However, ATRenew is 1.03 times more volatile than Hollywood Intermediate. It trades about 0.02 of its potential returns per unit of risk. Hollywood Intermediate is currently generating about -0.04 per unit of risk. If you would invest 312.00 in ATRenew Inc DRC on October 12, 2024 and sell it today you would lose (50.00) from holding ATRenew Inc DRC or give up 16.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATRenew Inc DRC vs. Hollywood Intermediate
Performance |
| Timeline |
| ATRenew Inc DRC |
| Hollywood Intermediate |
ATRenew and Hollywood Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRenew and Hollywood Intermediate
The main advantage of trading using opposite ATRenew and Hollywood Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRenew position performs unexpectedly, Hollywood Intermediate 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 Intermediate will offset losses from the drop in Hollywood Intermediate's long position.The idea behind ATRenew Inc DRC and Hollywood Intermediate 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.| Hollywood Intermediate vs. AMC Entertainment Holdings | Hollywood Intermediate vs. Cinemark Holdings | Hollywood Intermediate vs. Roku Inc | Hollywood Intermediate vs. Netflix |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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