Correlation Between World Wrestling and Madison Square
Can any of the company-specific risk be diversified away by investing in both World Wrestling and Madison Square 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 World Wrestling and Madison Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Wrestling Entertainment and Madison Square Garden, you can compare the effects of market volatilities on World Wrestling and Madison Square 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 World Wrestling with a short position of Madison Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Wrestling and Madison Square.
Diversification Opportunities for World Wrestling and Madison Square
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between World and Madison is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding World Wrestling Entertainment and Madison Square Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Square Garden and World Wrestling 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 World Wrestling Entertainment are associated (or correlated) with Madison Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Square Garden has no effect on the direction of World Wrestling i.e., World Wrestling and Madison Square go up and down completely randomly.
Pair Corralation between World Wrestling and Madison Square
If you would invest 18,382 in Madison Square Garden on August 24, 2024 and sell it today you would earn a total of 4,467 from holding Madison Square Garden or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
World Wrestling Entertainment vs. Madison Square Garden
Performance |
| Timeline |
| World Wrestling Ente |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Madison Square Garden |
World Wrestling and Madison Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Wrestling and Madison Square
The main advantage of trading using opposite World Wrestling and Madison Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Wrestling position performs unexpectedly, Madison Square 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 Madison Square will offset losses from the drop in Madison Square's long position.| World Wrestling vs. Liberty Media | World Wrestling vs. Live Nation Entertainment | World Wrestling vs. Madison Square Garden | World Wrestling vs. Warner Music Group |
| Madison Square vs. Atlanta Braves Holdings, | Madison Square vs. Liberty Media | Madison Square vs. Liberty Media | Madison Square vs. Atlanta Braves 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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