Correlation Between Disney and 36Kr Holdings

Can any of the company-specific risk be diversified away by investing in both Disney and 36Kr 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 Disney and 36Kr Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walt Disney and 36Kr Holdings, you can compare the effects of market volatilities on Disney and 36Kr 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 Disney with a short position of 36Kr Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and 36Kr Holdings.

Diversification Opportunities for Disney and 36Kr Holdings

-0.04

Correlation Coefficient

Disney  36Kr Holdings

Good diversification

The 3 months correlation between Disney and 36Kr is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and 36Kr Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 36Kr Holdings 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 36Kr Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 36Kr Holdings has no effect on the direction of Disney i.e., Disney and 36Kr Holdings go up and down completely randomly.

Pair Corralation between Disney and 36Kr Holdings

Considering the 90-day investment horizon Walt Disney is expected to under-perform the 36Kr Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Walt Disney is 17.57 times less risky than 36Kr Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The 36Kr Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  330.00  in 36Kr Holdings on December 1, 2024 and sell it today you would earn a total of  121.00  from holding 36Kr Holdings or generate 36.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Walt Disney  vs.  36Kr Holdings

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 comparatively stable forward indicators, Disney is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

36Kr Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 36Kr Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish forward-looking signals, 36Kr Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Disney and 36Kr Holdings

The main advantage of trading using opposite Disney and 36Kr Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, 36Kr 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 36Kr Holdings will offset losses from the drop in 36Kr Holdings' long position.

The idea behind Walt Disney and 36Kr 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.