Correlation Between Bowlero Corp and OneSpaWorld Holdings

Can any of the company-specific risk be diversified away by investing in both Bowlero Corp and OneSpaWorld Holdings 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 Bowlero Corp and OneSpaWorld Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bowlero Corp and OneSpaWorld Holdings, you can compare the effects of market volatilities on Bowlero Corp and OneSpaWorld Holdings 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 Bowlero Corp with a short position of OneSpaWorld Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowlero Corp and OneSpaWorld Holdings.

Diversification Opportunities for Bowlero Corp and OneSpaWorld Holdings

0.0

Correlation Coefficient

Bowlero Corp  OneSpaWorld Holdings

Pay attention - limited upside

The 3 months correlation between Bowlero and OneSpaWorld is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bowlero Corp and OneSpaWorld Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpaWorld Holdings and Bowlero Corp 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 Bowlero Corp are associated (or correlated) with OneSpaWorld Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpaWorld Holdings has no effect on the direction of Bowlero Corp i.e., Bowlero Corp and OneSpaWorld Holdings go up and down completely randomly.

Pair Corralation between Bowlero Corp and OneSpaWorld Holdings

If you would invest  1,899  in OneSpaWorld Holdings on November 28, 2024 and sell it today you would lose (16.00) from holding OneSpaWorld Holdings or give up 0.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bowlero Corp  vs.  OneSpaWorld Holdings

Bowlero Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bowlero Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bowlero Corp is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

OneSpaWorld Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days OneSpaWorld Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, OneSpaWorld Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Bowlero Corp and OneSpaWorld Holdings

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

The idea behind Bowlero Corp and OneSpaWorld Holdings 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.