Correlation Between Pop Culture and Sycamore Entmt

Can any of the company-specific risk be diversified away by investing in both Pop Culture and Sycamore Entmt 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 Pop Culture and Sycamore Entmt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pop Culture Group and Sycamore Entmt Grp, you can compare the effects of market volatilities on Pop Culture and Sycamore Entmt 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 Pop Culture with a short position of Sycamore Entmt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pop Culture and Sycamore Entmt.

Diversification Opportunities for Pop Culture and Sycamore Entmt

0.7

Correlation Coefficient

Pop Culture  Sycamore Entmt

Poor diversification

The 3 months correlation between Pop and Sycamore is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pop Culture Group and Sycamore Entmt Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sycamore Entmt Grp and Pop Culture 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 Pop Culture Group are associated (or correlated) with Sycamore Entmt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sycamore Entmt Grp has no effect on the direction of Pop Culture i.e., Pop Culture and Sycamore Entmt go up and down completely randomly.

Pair Corralation between Pop Culture and Sycamore Entmt

Given the investment horizon of 90 days Pop Culture Group is expected to under-perform the Sycamore Entmt. But the stock apears to be less risky and, when comparing its historical volatility, Pop Culture Group is 1.54 times less risky than Sycamore Entmt. The stock trades about -0.08 of its potential returns per unit of risk. The Sycamore Entmt Grp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.08  in Sycamore Entmt Grp on December 28, 2024 and sell it today you would lose (0.01) from holding Sycamore Entmt Grp or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

Pop Culture Group  vs.  Sycamore Entmt Grp

Pop Culture Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pop Culture Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Sycamore Entmt Grp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sycamore Entmt Grp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Sycamore Entmt demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pop Culture and Sycamore Entmt

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

The idea behind Pop Culture Group and Sycamore Entmt Grp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.