Correlation Between Seven Arts and American Picture
Can any of the company-specific risk be diversified away by investing in both Seven Arts and American Picture 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 Seven Arts and American Picture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven Arts Entertainment and American Picture House, you can compare the effects of market volatilities on Seven Arts and American Picture 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 Seven Arts with a short position of American Picture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven Arts and American Picture.
Diversification Opportunities for Seven Arts and American Picture
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seven and American is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Seven Arts Entertainment and American Picture House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Picture House and Seven Arts 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 Seven Arts Entertainment are associated (or correlated) with American Picture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Picture House has no effect on the direction of Seven Arts i.e., Seven Arts and American Picture go up and down completely randomly.
Pair Corralation between Seven Arts and American Picture
Given the investment horizon of 90 days Seven Arts Entertainment is expected to generate 1.72 times more return on investment than American Picture. However, Seven Arts is 1.72 times more volatile than American Picture House. It trades about 0.05 of its potential returns per unit of risk. American Picture House is currently generating about 0.04 per unit of risk. If you would invest 0.07 in Seven Arts Entertainment on November 9, 2024 and sell it today you would lose (0.04) from holding Seven Arts Entertainment or give up 57.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.13% |
| Values | Daily Returns |
Seven Arts Entertainment vs. American Picture House
Performance |
| Timeline |
| Seven Arts Entertainment |
| American Picture House |
Seven Arts and American Picture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven Arts and American Picture
The main advantage of trading using opposite Seven Arts and American Picture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven Arts position performs unexpectedly, American Picture 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 American Picture will offset losses from the drop in American Picture's long position.| Seven Arts vs. JPX Global | Seven Arts vs. Intl Star | Seven Arts vs. Indo Global Exchange | Seven Arts vs. Active Health Foods |
| American Picture vs. Netflix | American Picture vs. Walt Disney | American Picture vs. Roku Inc | American Picture vs. Paramount Global Class |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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