Correlation Between Roku and Eline Entertainment
Can any of the company-specific risk be diversified away by investing in both Roku and Eline 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 Roku and Eline Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and Eline Entertainment Group, you can compare the effects of market volatilities on Roku and Eline 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 Roku with a short position of Eline Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and Eline Entertainment.
Diversification Opportunities for Roku and Eline Entertainment
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Roku and Eline is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and Eline Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eline Entertainment and Roku 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 Roku Inc are associated (or correlated) with Eline Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eline Entertainment has no effect on the direction of Roku i.e., Roku and Eline Entertainment go up and down completely randomly.
Pair Corralation between Roku and Eline Entertainment
Given the investment horizon of 90 days Roku is expected to generate 32.28 times less return on investment than Eline Entertainment. But when comparing it to its historical volatility, Roku Inc is 7.81 times less risky than Eline Entertainment. It trades about 0.03 of its potential returns per unit of risk. Eline Entertainment Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.06 in Eline Entertainment Group on September 12, 2024 and sell it today you would lose (0.04) from holding Eline Entertainment Group or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roku Inc vs. Eline Entertainment Group
Performance |
| Timeline |
| Roku Inc |
| Eline Entertainment |
Roku and Eline Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and Eline Entertainment
The main advantage of trading using opposite Roku and Eline Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, Eline 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 Eline Entertainment will offset losses from the drop in Eline Entertainment's long position.The idea behind Roku Inc and Eline Entertainment Group 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.| Eline Entertainment vs. Roku Inc | Eline Entertainment vs. SNM Gobal Holdings | Eline Entertainment vs. Seven Arts Entertainment | Eline Entertainment vs. All For One |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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