Correlation Between Roku and E W
Can any of the company-specific risk be diversified away by investing in both Roku and E W 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 E W into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and E W Scripps, you can compare the effects of market volatilities on Roku and E W 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 E W. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and E W.
Diversification Opportunities for Roku and E W
Weak diversification
The 3 months correlation between Roku and SSP is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and E W Scripps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E W Scripps 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 E W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E W Scripps has no effect on the direction of Roku i.e., Roku and E W go up and down completely randomly.
Pair Corralation between Roku and E W
Given the investment horizon of 90 days Roku Inc is expected to generate 0.53 times more return on investment than E W. However, Roku Inc is 1.87 times less risky than E W. It trades about -0.06 of its potential returns per unit of risk. E W Scripps is currently generating about -0.07 per unit of risk. If you would invest 7,605 in Roku Inc on August 27, 2024 and sell it today you would lose (685.00) from holding Roku Inc or give up 9.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roku Inc vs. E W Scripps
Performance |
| Timeline |
| Roku Inc |
| E W Scripps |
Roku and E W Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and E W
The main advantage of trading using opposite Roku and E W positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, E W 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 E W will offset losses from the drop in E W's long position.| Roku vs. ADTRAN Inc | Roku vs. Belden Inc | Roku vs. ADC Therapeutics SA | Roku vs. Comtech Telecommunications 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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