Correlation Between Hollywood Bowl and T Mobile

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

Diversification Opportunities for Hollywood Bowl and T Mobile

0.37

Correlation Coefficient

Hollywood Bowl  T Mobile

Weak diversification

The 3 months correlation between Hollywood and TM5 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and T Mobile go up and down completely randomly.

Pair Corralation between Hollywood Bowl and T Mobile

Assuming the 90 days horizon Hollywood Bowl Group is expected to under-perform the T Mobile. In addition to that, Hollywood Bowl is 1.22 times more volatile than T Mobile. It trades about -0.13 of its total potential returns per unit of risk. T Mobile is currently generating about -0.05 per unit of volatility. If you would invest  21,360  in T Mobile on October 25, 2024 and sell it today you would lose (360.00) from holding T Mobile or give up 1.69% of portfolio value over 90 days.

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

Hollywood Bowl Group  vs.  T Mobile

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 unsteady 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.

T Mobile

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, T Mobile is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hollywood Bowl and T Mobile

The main advantage of trading using opposite Hollywood Bowl and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile's long position.

The idea behind Hollywood Bowl Group and T Mobile 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.