Correlation Between Hollywood Bowl and Intuitive Investments

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

Diversification Opportunities for Hollywood Bowl and Intuitive Investments

0.09

Correlation Coefficient

Hollywood Bowl  Intuitive Investments

Significant diversification

The 3 months correlation between Hollywood and Intuitive is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Intuitive Investments go up and down completely randomly.

Pair Corralation between Hollywood Bowl and Intuitive Investments

Assuming the 90 days trading horizon Hollywood Bowl is expected to generate 2.8 times less return on investment than Intuitive Investments. But when comparing it to its historical volatility, Hollywood Bowl Group is 3.08 times less risky than Intuitive Investments. It trades about 0.04 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,500  in Intuitive Investments Group on September 28, 2024 and sell it today you would earn a total of  4,400  from holding Intuitive Investments Group or generate 67.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.81%
Values	Daily Returns

Hollywood Bowl Group  vs.  Intuitive Investments Group

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. In spite of comparatively stable basic indicators, Hollywood Bowl is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Hollywood Bowl and Intuitive Investments

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

The idea behind Hollywood Bowl Group and Intuitive Investments Group 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.