Correlation Between Hollywood Bowl and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and AcadeMedia 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 AcadeMedia 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 AcadeMedia AB, you can compare the effects of market volatilities on Hollywood Bowl and AcadeMedia 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 AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and AcadeMedia.
Diversification Opportunities for Hollywood Bowl and AcadeMedia
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hollywood and AcadeMedia is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB 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 AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and AcadeMedia go up and down completely randomly.
Pair Corralation between Hollywood Bowl and AcadeMedia
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to under-perform the AcadeMedia. But the stock apears to be less risky and, when comparing its historical volatility, Hollywood Bowl Group is 1.2 times less risky than AcadeMedia. The stock trades about -0.03 of its potential returns per unit of risk. The AcadeMedia AB is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 6,810 in AcadeMedia AB on November 27, 2024 and sell it today you would earn a total of 745.00 from holding AcadeMedia AB or generate 10.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hollywood Bowl Group vs. AcadeMedia AB
Performance |
Timeline |
Hollywood Bowl Group |
AcadeMedia AB |
Hollywood Bowl and AcadeMedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hollywood Bowl and AcadeMedia
The main advantage of trading using opposite Hollywood Bowl and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.Hollywood Bowl vs. Westlake Chemical Corp | ||
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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