Correlation Between Team Internet and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Team Internet 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 Team Internet and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Team Internet Group and Hollywood Bowl Group, you can compare the effects of market volatilities on Team Internet 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 Team Internet with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Team Internet and Hollywood Bowl.
Diversification Opportunities for Team Internet and Hollywood Bowl
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Team and Hollywood is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Team Internet Group 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 Team Internet 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 Team Internet Group 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 Team Internet i.e., Team Internet and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Team Internet and Hollywood Bowl
Assuming the 90 days trading horizon Team Internet Group is expected to under-perform the Hollywood Bowl. In addition to that, Team Internet is 1.44 times more volatile than Hollywood Bowl Group. It trades about -0.03 of its total potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.03 per unit of volatility. If you would invest 23,512 in Hollywood Bowl Group on October 7, 2024 and sell it today you would earn a total of 5,438 from holding Hollywood Bowl Group or generate 23.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Team Internet Group vs. Hollywood Bowl Group
Performance |
| Timeline |
| Team Internet Group |
| Hollywood Bowl Group |
Team Internet and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Team Internet and Hollywood Bowl
The main advantage of trading using opposite Team Internet and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Team Internet 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.| Team Internet vs. PPHE Hotel Group | Team Internet vs. Metro Bank PLC | Team Internet vs. United Airlines Holdings | Team Internet vs. Erste Group Bank |
| Hollywood Bowl vs. SupplyMe Capital PLC | Hollywood Bowl vs. Lloyds Banking Group | Hollywood Bowl vs. SANTANDER UK 8 | Hollywood Bowl vs. Neometals |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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