Correlation Between Hollywood Bowl and MIRAMAR HOTEL

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

Diversification Opportunities for Hollywood Bowl and MIRAMAR HOTEL

0.36

Correlation Coefficient

Hollywood Bowl  MIRAMAR HOTEL

Weak diversification

The 3 months correlation between Hollywood and MIRAMAR is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV 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 MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and MIRAMAR HOTEL go up and down completely randomly.

Pair Corralation between Hollywood Bowl and MIRAMAR HOTEL

Assuming the 90 days horizon Hollywood Bowl is expected to generate 1.92 times less return on investment than MIRAMAR HOTEL. But when comparing it to its historical volatility, Hollywood Bowl Group is 1.32 times less risky than MIRAMAR HOTEL. It trades about 0.04 of its potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  64.00  in MIRAMAR HOTEL INV on November 20, 2024 and sell it today you would earn a total of  44.00  from holding MIRAMAR HOTEL INV or generate 68.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hollywood Bowl Group  vs.  MIRAMAR HOTEL INV

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MIRAMAR HOTEL INV

Risk-Adjusted Performance

Very Weak

Over the last 90 days MIRAMAR HOTEL INV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, MIRAMAR HOTEL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hollywood Bowl and MIRAMAR HOTEL

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

The idea behind Hollywood Bowl Group and MIRAMAR HOTEL INV 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.