Correlation Between Sage Group and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Sage Group 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 Sage Group and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sage Group PLC and Hollywood Bowl Group, you can compare the effects of market volatilities on Sage Group 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 Sage Group with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Group and Hollywood Bowl.
Diversification Opportunities for Sage Group and Hollywood Bowl
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sage and Hollywood is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sage Group PLC 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 Sage Group 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 Sage Group PLC 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 Sage Group i.e., Sage Group and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Sage Group and Hollywood Bowl
Assuming the 90 days trading horizon Sage Group PLC is expected to generate 0.89 times more return on investment than Hollywood Bowl. However, Sage Group PLC is 1.12 times less risky than Hollywood Bowl. It trades about 0.08 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.03 per unit of risk. If you would invest 73,710 in Sage Group PLC on November 2, 2024 and sell it today you would earn a total of 59,190 from holding Sage Group PLC or generate 80.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sage Group PLC vs. Hollywood Bowl Group
Performance |
| Timeline |
| Sage Group PLC |
| Hollywood Bowl Group |
Sage Group and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sage Group and Hollywood Bowl
The main advantage of trading using opposite Sage Group and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Group 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.| Sage Group vs. Broadcom | Sage Group vs. Blackrock World Mining | Sage Group vs. Kaufman Et Broad | Sage Group vs. Air Products Chemicals |
| Hollywood Bowl vs. Geely Automobile Holdings | Hollywood Bowl vs. Associated British Foods | Hollywood Bowl vs. Charter Communications Cl | Hollywood Bowl vs. Darden Restaurants |
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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