Correlation Between Dolphin Entertainment and Allient

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

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

Diversification Opportunities for Dolphin Entertainment and Allient

0.18

Correlation Coefficient

Dolphin Entertainment  Allient

Average diversification

The 3 months correlation between Dolphin and Allient is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Dolphin Entertainment 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 Dolphin Entertainment are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Dolphin Entertainment i.e., Dolphin Entertainment and Allient go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and Allient

Given the investment horizon of 90 days Dolphin Entertainment is expected to generate 1.64 times more return on investment than Allient. However, Dolphin Entertainment is 1.64 times more volatile than Allient. It trades about 0.03 of its potential returns per unit of risk. Allient is currently generating about 0.0 per unit of risk. If you would invest  104.00  in Dolphin Entertainment on December 28, 2024 and sell it today you would earn a total of  2.00  from holding Dolphin Entertainment or generate 1.92% return on investment over 90 days.

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

Dolphin Entertainment  vs.  Allient

Dolphin Entertainment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dolphin Entertainment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Dolphin Entertainment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Allient

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Allient is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dolphin Entertainment and Allient

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

The idea behind Dolphin Entertainment and Allient 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.