Correlation Between Universal Entertainment and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Universal Entertainment 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 Universal Entertainment and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Entertainment and Hollywood Bowl Group, you can compare the effects of market volatilities on Universal Entertainment 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 Universal Entertainment with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Entertainment and Hollywood Bowl.
Diversification Opportunities for Universal Entertainment and Hollywood Bowl
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and Hollywood is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment i.e., Universal Entertainment and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Universal Entertainment and Hollywood Bowl
Assuming the 90 days trading horizon Universal Entertainment is expected to under-perform the Hollywood Bowl. In addition to that, Universal Entertainment is 1.42 times more volatile than Hollywood Bowl Group. It trades about -0.1 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 294.00 in Hollywood Bowl Group on August 26, 2024 and sell it today you would earn a total of 78.00 from holding Hollywood Bowl Group or generate 26.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Entertainment vs. Hollywood Bowl Group
Performance |
| Timeline |
| Universal Entertainment |
| Hollywood Bowl Group |
Universal Entertainment and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Entertainment and Hollywood Bowl
The main advantage of trading using opposite Universal Entertainment and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Entertainment 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.| Universal Entertainment vs. Methode Electronics | Universal Entertainment vs. Richardson Electronics | Universal Entertainment vs. BJs Wholesale Club | Universal Entertainment vs. Benchmark Electronics |
| Hollywood Bowl vs. ANTA Sports Products | Hollywood Bowl vs. Trip Group Limited | Hollywood Bowl vs. Expedia Group | Hollywood Bowl vs. Shimano |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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