Correlation Between Disney and GA EXpress

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

By analyzing existing cross correlation between Walt Disney and GA eXpress, you can compare the effects of market volatilities on Disney and GA EXpress 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 GA EXpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and GA EXpress.

Diversification Opportunities for Disney and GA EXpress

-0.86

Correlation Coefficient

Disney  GA EXpress

Pay attention - limited upside

The 3 months correlation between Disney and GAEX is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and GA eXpress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GA eXpress 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 GA EXpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GA eXpress has no effect on the direction of Disney i.e., Disney and GA EXpress go up and down completely randomly.

Pair Corralation between Disney and GA EXpress

If you would invest  0.00  in GA eXpress on October 12, 2024 and sell it today you would earn a total of  0.00  from holding GA eXpress or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Walt Disney  vs.  GA eXpress

Walt Disney

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward indicators, Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.

GA eXpress

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GA eXpress has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Disney and GA EXpress

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

The idea behind Walt Disney and GA eXpress 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.