Correlation Between Hollywood Bowl and MGP Ingredients

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

Diversification Opportunities for Hollywood Bowl and MGP Ingredients

0.0

Correlation Coefficient

Hollywood Bowl  MGP Ingredients

Pay attention - limited upside

The 3 months correlation between Hollywood and MGP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and MGP Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGP Ingredients 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 MGP Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGP Ingredients has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and MGP Ingredients go up and down completely randomly.

Pair Corralation between Hollywood Bowl and MGP Ingredients

If you would invest (100.00) in MGP Ingredients on December 22, 2024 and sell it today you would earn a total of  100.00  from holding MGP Ingredients or generate -100.0% return on investment over 90 days.

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

Hollywood Bowl Group  vs.  MGP Ingredients

Hollywood Bowl Group

Risk-Adjusted Performance

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

MGP Ingredients

Risk-Adjusted Performance

Very Weak

Over the last 90 days MGP Ingredients has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, MGP Ingredients is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hollywood Bowl and MGP Ingredients

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

The idea behind Hollywood Bowl Group and MGP Ingredients 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.