Correlation Between Hollywood Bowl and JD HEALTH

Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and JD HEALTH 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 JD HEALTH 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 JD HEALTH INTL, you can compare the effects of market volatilities on Hollywood Bowl and JD HEALTH 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 JD HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and JD HEALTH.

Diversification Opportunities for Hollywood Bowl and JD HEALTH

0.07

Correlation Coefficient

Hollywood Bowl  JD HEALTH

Significant diversification

The 3 months correlation between Hollywood and 8ZN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL 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 JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and JD HEALTH go up and down completely randomly.

Pair Corralation between Hollywood Bowl and JD HEALTH

If you would invest (100.00) in JD HEALTH INTL on October 27, 2024 and sell it today you would earn a total of  100.00  from holding JD HEALTH INTL or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hollywood Bowl Group  vs.  JD HEALTH INTL

Hollywood Bowl Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hollywood Bowl Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

JD HEALTH INTL

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days JD HEALTH INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, JD HEALTH may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hollywood Bowl and JD HEALTH

The main advantage of trading using opposite Hollywood Bowl and JD HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, JD HEALTH 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 JD HEALTH will offset losses from the drop in JD HEALTH's long position.

The idea behind Hollywood Bowl Group and JD HEALTH INTL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.