Correlation Between Chicken Soup and Disney

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

By analyzing existing cross correlation between Chicken Soup For and Walt Disney, you can compare the effects of market volatilities on Chicken Soup and Disney 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 Chicken Soup with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicken Soup and Disney.

Diversification Opportunities for Chicken Soup and Disney

0.0

Correlation Coefficient

Chicken Soup  Disney

Pay attention - limited upside

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

Pair Corralation between Chicken Soup and Disney

If you would invest (100.00) in Chicken Soup For on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Chicken Soup For or generate -100.0% return on investment over 90 days.

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

Chicken Soup For  vs.  Walt Disney

Chicken Soup For

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chicken Soup For has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Chicken Soup is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Walt Disney

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walt Disney has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Chicken Soup and Disney

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

The idea behind Chicken Soup For and Walt Disney 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.