Correlation Between Hollywood Bowl and Sportsmans Warehouse
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Sportsmans Warehouse 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 Hollywood Bowl and Sportsmans Warehouse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hollywood Bowl Group and Sportsmans Warehouse Holdings, you can compare the effects of market volatilities on Hollywood Bowl and Sportsmans Warehouse 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 Hollywood Bowl with a short position of Sportsmans Warehouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Sportsmans Warehouse.
Diversification Opportunities for Hollywood Bowl and Sportsmans Warehouse
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hollywood and Sportsmans is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Sportsmans Warehouse Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsmans Warehouse and Hollywood Bowl 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 Hollywood Bowl Group are associated (or correlated) with Sportsmans Warehouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsmans Warehouse has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Sportsmans Warehouse go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Sportsmans Warehouse
Assuming the 90 days horizon Hollywood Bowl Group is expected to under-perform the Sportsmans Warehouse. But the stock apears to be less risky and, when comparing its historical volatility, Hollywood Bowl Group is 2.38 times less risky than Sportsmans Warehouse. The stock trades about -0.29 of its potential returns per unit of risk. The Sportsmans Warehouse Holdings is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 198.00 in Sportsmans Warehouse Holdings on October 9, 2024 and sell it today you would earn a total of 50.00 from holding Sportsmans Warehouse Holdings or generate 25.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hollywood Bowl Group vs. Sportsmans Warehouse Holdings
Performance |
Timeline |
Hollywood Bowl Group |
Sportsmans Warehouse |
Hollywood Bowl and Sportsmans Warehouse Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hollywood Bowl and Sportsmans Warehouse
The main advantage of trading using opposite Hollywood Bowl and Sportsmans Warehouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Sportsmans Warehouse 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 Sportsmans Warehouse will offset losses from the drop in Sportsmans Warehouse's long position.Hollywood Bowl vs. Pure Storage | Hollywood Bowl vs. Highlight Communications AG | Hollywood Bowl vs. GMO Internet | Hollywood Bowl vs. DATATEC LTD 2 |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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