Correlation Between Warner Bros and Bolloré SE
Can any of the company-specific risk be diversified away by investing in both Warner Bros and Bolloré SE 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 Warner Bros and Bolloré SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warner Bros Discovery and Bollor SE, you can compare the effects of market volatilities on Warner Bros and Bolloré SE 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 Warner Bros with a short position of Bolloré SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Bros and Bolloré SE.
Diversification Opportunities for Warner Bros and Bolloré SE
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Warner and Bolloré is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Warner Bros Discovery and Bollor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolloré SE and Warner Bros 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 Warner Bros Discovery are associated (or correlated) with Bolloré SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolloré SE has no effect on the direction of Warner Bros i.e., Warner Bros and Bolloré SE go up and down completely randomly.
Pair Corralation between Warner Bros and Bolloré SE
Considering the 90-day investment horizon Warner Bros Discovery is expected to generate 2.44 times more return on investment than Bolloré SE. However, Warner Bros is 2.44 times more volatile than Bollor SE. It trades about 0.39 of its potential returns per unit of risk. Bollor SE is currently generating about -0.11 per unit of risk. If you would invest 777.00 in Warner Bros Discovery on August 31, 2024 and sell it today you would earn a total of 261.00 from holding Warner Bros Discovery or generate 33.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warner Bros Discovery vs. Bollor SE
Performance |
| Timeline |
| Warner Bros Discovery |
| Bolloré SE |
Warner Bros and Bolloré SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warner Bros and Bolloré SE
The main advantage of trading using opposite Warner Bros and Bolloré SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Bros position performs unexpectedly, Bolloré SE 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 Bolloré SE will offset losses from the drop in Bolloré SE's long position.| Warner Bros vs. News Corp B | Warner Bros vs. Fox Corp Class | Warner Bros vs. AMC Networks | Warner Bros vs. Marcus |
| Bolloré SE vs. ZoomerMedia Limited | Bolloré SE vs. Network Media Group | Bolloré SE vs. New Wave Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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