Correlation Between Dolphin Entertainment and Cheer Holding

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

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

Diversification Opportunities for Dolphin Entertainment and Cheer Holding

0.69

Correlation Coefficient

Dolphin Entertainment  Cheer Holding

Poor diversification

The 3 months correlation between Dolphin and Cheer is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and Cheer Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheer Holding 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 Cheer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheer Holding has no effect on the direction of Dolphin Entertainment i.e., Dolphin Entertainment and Cheer Holding go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and Cheer Holding

Given the investment horizon of 90 days Dolphin Entertainment is expected to under-perform the Cheer Holding. But the stock apears to be less risky and, when comparing its historical volatility, Dolphin Entertainment is 1.13 times less risky than Cheer Holding. The stock trades about -0.05 of its potential returns per unit of risk. The Cheer Holding is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,170  in Cheer Holding on October 21, 2024 and sell it today you would lose (920.00) from holding Cheer Holding or give up 78.63% of portfolio value over 90 days.

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

Dolphin Entertainment  vs.  Cheer Holding

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 February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cheer Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cheer Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Dolphin Entertainment and Cheer Holding

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

The idea behind Dolphin Entertainment and Cheer Holding 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.