Correlation Between Disney and Ashmore Group
Can any of the company-specific risk be diversified away by investing in both Disney and Ashmore Group 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 Disney and Ashmore Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Ashmore Group Plc, you can compare the effects of market volatilities on Disney and Ashmore Group 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 Disney with a short position of Ashmore Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Ashmore Group.
Diversification Opportunities for Disney and Ashmore Group
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Disney and Ashmore is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Ashmore Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Group Plc and Disney 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 Walt Disney are associated (or correlated) with Ashmore Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Group Plc has no effect on the direction of Disney i.e., Disney and Ashmore Group go up and down completely randomly.
Pair Corralation between Disney and Ashmore Group
Considering the 90-day investment horizon Walt Disney is expected to generate 1.0 times more return on investment than Ashmore Group. However, Walt Disney is 1.0 times less risky than Ashmore Group. It trades about 0.06 of its potential returns per unit of risk. Ashmore Group Plc is currently generating about -0.16 per unit of risk. If you would invest 11,082 in Walt Disney on December 3, 2024 and sell it today you would earn a total of 298.00 from holding Walt Disney or generate 2.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 97.5% |
Values | Daily Returns |
Walt Disney vs. Ashmore Group Plc
Performance |
Timeline |
Walt Disney |
Ashmore Group Plc |
Disney and Ashmore Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Disney and Ashmore Group
The main advantage of trading using opposite Disney and Ashmore Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Ashmore Group 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 Ashmore Group will offset losses from the drop in Ashmore Group's long position.Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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