Correlation Between Hollywood Bowl and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Alfa Financial 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 Alfa Financial 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 Alfa Financial Software, you can compare the effects of market volatilities on Hollywood Bowl and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Alfa Financial.
Diversification Opportunities for Hollywood Bowl and Alfa Financial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hollywood and Alfa is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Alfa Financial go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Alfa Financial
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to under-perform the Alfa Financial. In addition to that, Hollywood Bowl is 1.46 times more volatile than Alfa Financial Software. It trades about -0.1 of its total potential returns per unit of risk. Alfa Financial Software is currently generating about -0.01 per unit of volatility. If you would invest 21,700 in Alfa Financial Software on September 24, 2024 and sell it today you would lose (150.00) from holding Alfa Financial Software or give up 0.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hollywood Bowl Group vs. Alfa Financial Software
Performance |
Timeline |
Hollywood Bowl Group |
Alfa Financial Software |
Hollywood Bowl and Alfa Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hollywood Bowl and Alfa Financial
The main advantage of trading using opposite Hollywood Bowl and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.Hollywood Bowl vs. Ondine Biomedical | Hollywood Bowl vs. Europa Metals | Hollywood Bowl vs. Revolution Beauty Group | Hollywood Bowl vs. Moonpig Group PLC |
Alfa Financial vs. Hollywood Bowl Group | Alfa Financial vs. Zinc Media Group | Alfa Financial vs. Grand Vision Media | Alfa Financial vs. Cardinal Health |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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