Correlation Between Dolphin Entertainment and Clear Channel

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

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

Diversification Opportunities for Dolphin Entertainment and Clear Channel

0.27

Correlation Coefficient

Dolphin Entertainment  Clear Channel

Modest diversification

The 3 months correlation between Dolphin and Clear is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and Clear Channel Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Channel Outdoor 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 Clear Channel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Channel Outdoor has no effect on the direction of Dolphin Entertainment i.e., Dolphin Entertainment and Clear Channel go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and Clear Channel

Given the investment horizon of 90 days Dolphin Entertainment is expected to under-perform the Clear Channel. In addition to that, Dolphin Entertainment is 1.55 times more volatile than Clear Channel Outdoor. It trades about -0.1 of its total potential returns per unit of risk. Clear Channel Outdoor is currently generating about -0.01 per unit of volatility. If you would invest  163.00  in Clear Channel Outdoor on September 12, 2024 and sell it today you would lose (8.00) from holding Clear Channel Outdoor or give up 4.91% of portfolio value over 90 days.

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

Dolphin Entertainment  vs.  Clear Channel Outdoor

Dolphin Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dolphin Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Clear Channel Outdoor

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Clear Channel Outdoor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Clear Channel is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Dolphin Entertainment and Clear Channel

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

The idea behind Dolphin Entertainment and Clear Channel Outdoor 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.