Correlation Between Clean Energy and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Clean Energy 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 Clean Energy and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Energy Fuels and Hollywood Bowl Group, you can compare the effects of market volatilities on Clean Energy 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 Clean Energy with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and Hollywood Bowl.
Diversification Opportunities for Clean Energy and Hollywood Bowl
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clean and Hollywood is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels 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 Clean Energy 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 Clean Energy Fuels 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 Clean Energy i.e., Clean Energy and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Clean Energy and Hollywood Bowl
Assuming the 90 days horizon Clean Energy Fuels is expected to generate 1.54 times more return on investment than Hollywood Bowl. However, Clean Energy is 1.54 times more volatile than Hollywood Bowl Group. It trades about 0.19 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.01 per unit of risk. If you would invest 284.00 in Clean Energy Fuels on November 7, 2024 and sell it today you would earn a total of 33.00 from holding Clean Energy Fuels or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Energy Fuels vs. Hollywood Bowl Group
Performance |
| Timeline |
| Clean Energy Fuels |
| Hollywood Bowl Group |
Clean Energy and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and Hollywood Bowl
The main advantage of trading using opposite Clean Energy and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy 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.| Clean Energy vs. Peijia Medical Limited | Clean Energy vs. CAL MAINE FOODS | Clean Energy vs. Advanced Medical Solutions | Clean Energy vs. Merit Medical Systems |
| Hollywood Bowl vs. British American Tobacco | Hollywood Bowl vs. SALESFORCE INC CDR | Hollywood Bowl vs. Tradeweb Markets | Hollywood Bowl vs. TRADEGATE |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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