Correlation Between Hollywood Bowl and Ecofin Global
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Ecofin Global 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 Ecofin Global 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 Ecofin Global Utilities, you can compare the effects of market volatilities on Hollywood Bowl and Ecofin Global 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 Ecofin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Ecofin Global.
Diversification Opportunities for Hollywood Bowl and Ecofin Global
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hollywood and Ecofin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities 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 Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Ecofin Global go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Ecofin Global
Assuming the 90 days trading horizon Hollywood Bowl Group is expected to under-perform the Ecofin Global. In addition to that, Hollywood Bowl is 1.38 times more volatile than Ecofin Global Utilities. It trades about -0.1 of its total potential returns per unit of risk. Ecofin Global Utilities is currently generating about -0.02 per unit of volatility. If you would invest 19,050 in Ecofin Global Utilities on October 31, 2024 and sell it today you would lose (500.00) from holding Ecofin Global Utilities or give up 2.62% 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. Ecofin Global Utilities
Performance |
Timeline |
Hollywood Bowl Group |
Ecofin Global Utilities |
Hollywood Bowl and Ecofin Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hollywood Bowl and Ecofin Global
The main advantage of trading using opposite Hollywood Bowl and Ecofin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Ecofin Global 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 Ecofin Global will offset losses from the drop in Ecofin Global's long position.Hollywood Bowl vs. Spire Healthcare Group | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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