Correlation Between SPARTAN STORES and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES 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 SPARTAN STORES and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Hollywood Bowl Group, you can compare the effects of market volatilities on SPARTAN STORES 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 SPARTAN STORES with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Hollywood Bowl.
Diversification Opportunities for SPARTAN STORES and Hollywood Bowl
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPARTAN and Hollywood is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES i.e., SPARTAN STORES and Hollywood Bowl go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Hollywood Bowl
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the Hollywood Bowl. But the stock apears to be less risky and, when comparing its historical volatility, SPARTAN STORES is 1.03 times less risky than Hollywood Bowl. The stock trades about 0.0 of its potential returns per unit of risk. The Hollywood Bowl Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 304.00 in Hollywood Bowl Group on August 31, 2024 and sell it today you would earn a total of 74.00 from holding Hollywood Bowl Group or generate 24.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. Hollywood Bowl Group
Performance |
| Timeline |
| SPARTAN STORES |
| Hollywood Bowl Group |
SPARTAN STORES and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and Hollywood Bowl
The main advantage of trading using opposite SPARTAN STORES and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES 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.| SPARTAN STORES vs. SIVERS SEMICONDUCTORS AB | SPARTAN STORES vs. Darden Restaurants | SPARTAN STORES vs. Reliance Steel Aluminum | SPARTAN STORES vs. Q2M Managementberatung AG |
| Hollywood Bowl vs. MIRAMAR HOTEL INV | Hollywood Bowl vs. INTERCONT HOTELS | Hollywood Bowl vs. Summit Hotel Properties | Hollywood Bowl vs. NXP Semiconductors NV |
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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